BEIJING, Nov 21: China has been buying up euros for its foreign currency reserves in the belief the single European currency is a safe bet for the country, a Chinese central bank governor said.

China was unconcerned by fluctuations in the euro’s value, Guo Shuqing, vice-governor of the People’s Bank of China, was quoted as saying by the state-run China Daily on Wednesday.

The central bank believed it was “vital” for China to stock up adequate amounts of the currency within its $200 billion plus reserves, Guo said.

Stocks of the euro have been growing in our foreign currency reserves, Guo told a reception in Beijing Tuesday, sponsored by the European Union Chamber of Commerce in China.

During the past two months we have bought a lot of euros. In the coming months, we’ll buy more, said Guo, also director of China’s State Administration of Foreign Exchange, without specifying the timing and scale of the purchases.

Guo said the bank believes that in the medium and long term, the euro, backed by the European Union’s economic strength, will be a fairly stable currency, the newspaper reported.

Guo said China’s foreign currency reserves stood at $203 billion at the end of October. They are the second-largest of any country in the world after Japan.

Its reserves increased by 7.0 per cent last year after a 6.7-per cent rise in 1999, according to central bank figures. The October figure represents a leap of more than 20 per cent on reserves held at the end of 2000.

The euro, which was introduced at the start of 1999, is set to replace the individual currencies of 12 European Union member states on January 1, next year.—AFP