China says diversifying FX reserves is long-term policy

BEIJING, Oct 26 - Diversification of China's foreign exchange reserves, the world's largest at more than $2 trillion, is a long-term policy, Yi Gang, a central bank vice governor, told Reuters on Monday.

Asked whether China would try to buy more euro or yen, he said that reserve diversification "did not mean short-term volatility".

Yi also reiterated that China would maintain a basically stable yuan exchange rate. (Reporting by Aileen Wang and Simon Rabinovitch, editing by Mike Peacock)