“We hope that as the main reserve currency the exchange rate of the U.S. dollar will be stable,” Vice Foreign Minister He Yafei told reporters in Beijing Thursday. The official said he's “not aware” of China pushing to put the subject on the G-8 agenda.

The dollar strengthened as He's comments eased concern that China plans to diversify its US$1.95 trillion of currency reserves. Central bank Governor Zhou --iaochuan called in March for the creation of a “super-sovereign” currency, after Premier Wen Jiabao voiced concern that a weakening dollar would erode the value of the nation's U.S. assets.

“The magnitude of China's foreign-exchange holdings limits its ability to move out of the dollar very quickly without shooting itself in the foot,” said David Cohen, an economist with Action Economics in Singapore. “Finding alternatives is a long-term goal.”

The dollar climbed to US$1.4094 per euro as of 5:53 p.m. in Tokyo from US$1.4142 in New York Wednesday. It was at 96.68 yen from 96.65.

The dollar declined beyond US$1.42 versus the euro Wednesday after Reuters, citing G-8 sources, said China asked to debate proposals for a new global reserve currency at the summit.

Japanese Vice Finance Minister Kazuyuki Sugimoto said in Tokyo Thursday that he's unaware whether the G-8 leaders will discuss a replacement for the dollar.

In a separate Chinese statement Thursday, the central bank said it will let companies settle cross-border trade in yuan, seeking to reduce the reliance of importers and exporters on the dollar.

The People's Bank of China renewed on June 26 its call for a new global currency and said the International Monetary Fund should manage more of members' foreign-exchange reserves.

To avoid the inherent deficiencies of using sovereign currencies for “reserves, there's a need to create an international reserve currency that's delinked from sovereign nations,” the central bank said in a report. The IMF should expand the functions of its unit of account, Special Drawing Rights, the report said.

China is the biggest foreign holder of Treasuries, with US$763.5 billion as of April. U.S. President Barack Obama is relying on the Asian nation to keep making purchases as his administration sells record amounts of debt to fund a US$787 billion stimulus package.

At the end of 2008, the dollar accounted for 64 percent of global central bank reserves, down from 73 percent in 2001, according to the IMF.