UPDATE 1-China c.banker says policy loose into 2010 -media

(For more stories on the Chinese economy, click [ID:nECONCN])

* C.banker's comments rare signal on timing of policy moves

* Says growth still trumps inflation as a concern

* Says to maintain liquidity to help with recovery

BEIJING, Sept 17 - China will maintain its "appropriately loose" monetary policy into next year, domestic media on Thursday cited a top central banker as saying, the clearest signal yet on how long Beijing will maintain that stance.

Su Ning, vice governor of the People's Bank of China, made the comments at a forum on Thursday, the website of the Economic Observer newspaper (www.eeo.com.cn) reported.

"The key responsibility of China's monetary policy in the coming period is to maintain economic growth, and China will keep its appropriately relaxed monetary policy in the second half (of this year) and into next year," it paraphrased Su as saying.

It was the first time during the current loosening cycle for a central banker to give such a clear timeframe for how long the "appropriately loose" monetary policy stance will last, although officials as senior as Premier Wen Jiabao have repeatedly said they intend to maintain it along with a proactive fiscal policy.

Su cited uncertainties over the global economic recovery as one reason to stick with the current policy for the rest of this year and into 2010, the newspaper's website said.

The fact that domestic prices are still falling from their year-earlier levels also means growth, not inflation, is the top priority for the PBOC for now, Su was quoted as saying.

Su downplayed the recent surge in money supply growth, which some economists have highlighted as posing a risk of inflation down the road. Annual growth in the broad M2 measure of money supply hit a record 28.5 percent in August, the third month in a row that it grew by more than 28 percent. "Money supply will keep growing, but that growth will not accelerate every month, and we will not change our policy simply based on one-month changes," Su was quoted as saying.

"The PBOC will maintain liquidity in the banking system to help an economic recovery," he added.

Some analysts have said the central bank may have to tighten monetary policy as early as the fourth quarter of this year, especially after data for August that showed an acceleration in industrial output, investment and credit growth. [ID:nPEK13979]

Chen Dongqi, vice-head of the macroeconomic institute under the National Development and Reform Commission (NDRC), said on Thursday the economy may regain double-digit annual growth in the fourth quarter of this year, potentially bringing closer the day when tightening might be necessary. [ID:nPEK368397]

Chen added that Beijing may have to consider tightening monetary policy if annual GDP growth exceeds 9 percent, consumer inflation exceeds 3 percent or export growth is above 15 percent, but he said the proactive fiscal policy would remain intact.