* Weak dlr no concern for China FX reserves-former official
* No need for one-off revaluation due to imported inflation
(Adds details and quotes)
HANOI May 3 China need not worry about the
effect of the weakening dollar on its foreign exchange reserves
and should not quicken the pace of yuan appreciation because of
"temporary" factors, a former deputy foreign exchange regulator
said on Tuesday.
China's foreign exchange reserves, the biggest stockpile in
the world, surged to $3.05 trillion by the end of the first
quarter, heightening long-standing worries about how China can
effectively manage the holdings and not become overly exposed to
the U.S. dollar.
The dollar hobbled near a three-year trough against a
currency basket on Tuesday, undermined by loose U.S. monetary
policy, fanning concerns that it may further erode the value of
China's foreign exchange reserves, which have so far been mainly
invested in U.S. dollar assets, including U.S. Treasuries.
"It is not necessary for China to worry about the impact of
the weakening U.S. dollar on our foreign exchange reserves
because we are pushing forward with a strategy of diversifying
our investments of foreign reserves," the official, Wei Benhua,
said on the sidelines of a regional meeting in Hanoi.
Wei is set to be the director of the new ASEAN+3
Macroeconomic Research Office (AMRO), which will monitor the
macro economic policies and financial institutions of the member
countries to prevent risks in the region.
He also said that China would not make a one-off currency
revaluation or resort to a quicker pace of yuan appreciation to
ward off mounting imported inflationary pressure.
"It won't happen simply because of some temporary factors,
such as a rising imported inflation, among others," Wei added.
The yuan pulled back slightly against the dollar on Tuesday
from a slew of recent record highs, as the People's Bank of
China fixed a marginally weaker mid-point, signalling the
central bank will stick to gradualism in reforming the country's
"We have been emphasizing it all the time that China is
sticking to a managed floating foreign exchange rate, which is
based on the relationship in the market between supply and
demand in reference to a basket of currencies," Wei said.
(Reporting by Aileen Wang; Editing by John Ruwitch and John