That will give the People's Bank of China more leeway to tighten policy by further raising banks' required reserves, aggressively draining liquidity through open-market operations and restricting bank lending, according to analysts familiar with the policy debate in Beijing.
China is expected to raise interest rates only a couple of times this year, partly a reflection of the fact that the cabinet, not the central bank, makes the final call on rates and it must balance between rival groups in the government.
The highest echelon of leaders also decides on major changes to the country's currency regime given its political importance, but despite these limitations, the central bank is establishing itself as a stronger player in Beijing as the nearly decade-long term of Governor Zhou Xiaochuan draws to a close.
It was instrumental in tilting the official consensus to fighting inflation from supporting growth late last year, helped by its long-standing warning that rising prices would pose a threat, analysts say.
"The central bank's economic foresight is better than other state agencies, including the NDRC," said Gao Shanwen, chief economist at Essence Securities, referring to the National Development and Reform Commission, a powerful planning agency that sets economic targets and oversees investment projects.
That has allowed the central bank to gain the upper hand in the debate over inflation.
While the central bank sounded the alarm bell early last year and moved quickly to tighten liquidity by raising banks' required reserves, the NDRC, which tends to be more pro-growth, insisted inflation would be benign.
The NDRC had to change its rhetoric after inflation continued to accelerate, racing to a 28-month high of 5.1 percent in the year to November. The agency made a quick about-turn to campaign for tough measures to control food prices.
INFIGHTING
To be sure, no one is saying that the central bank is about to win policy independence, just greater influence.
"Every government department has its own vested interest and the central bank has to fight with other state agencies," said Wang Hu, an economist at Guotai Junan Securities in Shanghai.
Another dispute between the central bank and the NDRC was over the bank lending target for 2011, with the former initially proposing a target of 6.5 trillion yuan (622 billion pounds) against 8 trillion yuan wanted by the NDRC, the Economic Observer reported last month.
The government appears to have split the difference, with local media saying that 7.2 trillion yuan will be the rough target. But with that representing a 10 percent decline from last year's new loan total, the central bank got its way on the bigger issue of whether to tighten or not.
The central bank has also fought a turf battle with the banking regulator over how to exercise day-to-day control of commercial loan issuance.