Top c.banks not planning shift out of euro - govt sources

Some of the world's richest central banks will not stop investing in the euro, supporting its reserve status, despite the sovereign debt crisis hammering the euro zone's currency, government sources said. Official sources in Brazil, India, Russia, Japan and South Korea told in separate interviews that their reserve currency portfolios were too big to change without affecting markets, and there were no alternatives in the near term to the liquidity of the euro and the U.S. dollar. The four countries control nearly a quarter of the world's $8.09 trillion in foreign exchange reserves. Global market sensitivity to reserve management was highlighted last week after the Financial Times reported that China was reviewing its euro zone bond holdings because of growing concerns about gaping deficits in countries such as Greece and Portugal. A Chinese government official told Reuters last week after the report that China's goal of diversifying its reserves will not change. The euro fell and stocks skidded, but later recouped some of their losses after China said on Thursday the report was groundless, adding that Europe will remain a major target of its enormous portfolio. Like China, sources in other countries told Reuters they were not going to walk away from the euro. "Even if the dollar or the euro is in trouble, is there anywhere else to invest? Not really. There needs to be a certain degree of liquidity," said a senior Japanese government official, who asked not to be identified because of the political sensitivity of the issue. "Currencies of countries with capital controls won't work too. That leaves us with very few options," the official said. Japan's $1.05 trillion in reserves is second only to China's $2.45 trillion.