* PBOC researcher backs quantitative tools over rates
* World Bank says China should have rates in policy tool kit
BEIJING, Oct 19 (Reuters) - China should mainly rely on quantitative monetary tools to curb inflation and not raise interest rates this year, Wang Yong, a central bank researcher, said in an article published on Tuesday.
China has not raised its benchmark interest rates so far this year, even though inflation-adjusted deposit rates have been negative since February.
Most economists do not expect a rise this year, but Louis Kuijs, senior economist at the World Bank's Beijing office, said increasing rates would give China greater autonomy to adapt monetary policy to domestic economic conditions.
"Having interest rates as one of the instruments to change monetary policy, this is largely a question of efficiency and of better allocation of financial resources," Kuijs told reporters.
Wang, a professor at the training school at a local branch of the People's Bank of China, said China should make the yuan more flexible by increasing its two-way movements.
"But yuan reform must be carried out in line with China's own need and should never rise fast under pressure from the United States and Europe," he said in an article published in the Shanghai Securities News.
To ease pressure for yuan appreciation, China should loosen rules regarding foreign exchange in support of domestic firms investing abroad, he added.
Ardo Hansson, the World Bank's lead economist in Beijing, restated the lender's view that real appreciation of the yuan was in China's interests for many reasons.
He was speaking at the same briefing as Kuijs, who said China was right to retain capital controls even as it steps up efforts to internationalise the yuan -- a policy he called sensible.
"Especially in episodes like we are facing today with the possibility of more inflows coming from international liquidity, I think it makes sense to keep those controls. This is not the time to start to relax," Kuijs said. (Reporting by Langi Chiang, Aileen Wang and Simon Rabinovitch; Editing by Alan Wheatley)