China says FX reserves not exposed to U.S. subprime

BEIJING (Reuters) - None of China's $1.33 trillion stash of foreign exchange reserves, the world's largest, is invested in U.S. subprime mortgage backed securities, a senior foreign exchange agency official said on Monday.

The comments by Wei Benhua, deputy head of the State Administration of Foreign Exchange, underline Beijing's earlier assertions that the country has only limited exposure to the problems in the U.S. subprime market that have caused worldwide market turmoil over the past several weeks.

"As for China's official foreign exchange reserves, we have no holdings of U.S. subprime securities," Wei Benhua, deputy head of the State Administration of Foreign Exchange (SAFE), told reporters on the sidelines of a forum.

SAFE manages the country's foreign exchange reserves.

Wei's comments come after a senior central banker said last week that the country had limited exposure to U.S. subprime ills, and that its commercial banks had set aside adequate provisions for dealing with the problems.

Bank of China (601988.SS) (3988.HK) said last month that it held $8.965 billion in U.S. subprime mortgage-backed loans as of the end of June.

Industrial and Commercial Bank of China (1398.HK) reported a holding of $1.22 billion and China Construction Bank (0939.HK) said it had $1.06 billion.

Analysts say that China's capital controls have helped insulate it from the recent subprime-related credit crunch.

Shares on its main share index .SSEC have continued to climb in the face of global market jitters; they were up 1.6 percent in early trade on Monday.