BEIJING (Reuters) -China's central bank will boost demand and support a modest rebound in prices, the Financial News, a publication run by the People's Bank of China (PBOC) said on Wednesday, citing a unnamed senior central bank official.

The PBOC will ramp up its coordination with fiscal and industrial policies and strengthen the guidance of expectations, while closely monitoring the effects of financial policies, the official was quoted as saying.

The central bank "will create an appropriate monetary and financial environment to promote effective demand in the real economy, support a moderate recovery in prices and enhance economic vitality," the official said.

China's firm credit growth was also in line with the recovery, as borrowing costs in the real economy fell, the official was quoted as saying.

New bank loans beat expectations by nearly quadrupling in August from July, as the central bank sought to shore up economic growth amid soft demand at home and abroad.

China has in recent weeks rolled out a series of measures, including interest rate cuts and property easing steps, to support the economy, which has struggled after its post-pandemic recovery faltered.

"We cannot rule out a RRR cut and the use of structural tools to guide financial institutions to increase support for the real economy and promote a faster recovery of domestic demand," said Zhou Maohua, analyst at China Everbright Bank.

The central bank last cut the reserve requirement ratio (RRR) - the amount of cash that banks must hold as reserves - in March.

In August, the PBOC cut its one-year benchmark lending rate, or the loan prime rate (LPR), by 10 basis points to 3.45%.

In August, the weighted average corporate lending rate was at 3.85%, down 20 basis points from a year earlier, while the weighted average mortgage rate fell by 38 basis points to 4.12%, Financial News quoted the central bank official as saying.

China's consumer prices returned to positive growth in August as deflationary pressures eased amid signs of stabilisation in the economy.

Officials in Beijing have long said there is no basis for any long-term deflation.

"Reduction in existing mortgage rates will effectively reduce the interest burden on residents," the official was quoted as saying.

Five of China's major state banks said last week they will start to lower interest rates on existing mortgages for first-home loans, part of measures to aid the ailing property sector.

Early mortgage repayments have been reduced, which would help boost consumer confidence, said the official.

(Reporting by Beijing Newsroom, Kevin Yao and Liangping Gao; Editing by Tom Hogue, Sam Holmes and Miral Fahmy)