* Says loose monetary policy to stay * Remarks come soon after c.bank lifts reserve requirements

(Adds further details, background) By Zhou Xin and Rie Ishiguro

TASHKENT, May 2 (Reuters) - China reaffirmed on Sunday its resistance to pressures to let the yuan CNY=CFX rise sharply, dismissing arguments that its foreign exchange policy was mainly responsible for the country's trade surplus.

Finance Minister Xie Xuren also made it clear the world's third-largest economy would stick with its long-held policy stance of reforming its foreign exchange rate mechanism despite conflicts with the United States.

We will continue to promote the perfection of the yuan exchange rate formation mechanism and to keep the yuan exchange rate basically stable at a reasonable and balanced level, Xie told a news conference in the Uzbek capital.

You really can't cite China's trade surplus as an excuse to ask China to let the yuan appreciate, Xie said, adding the country's stable currency has helped the global economy turn around from the worst down in many decades.

China is under increasing pressure to let its currency, also known as the renminbi, start to strengthen again after being virtually pegged to the dollar since mid-2008 as the economy has sought to weather the global downturn.

It was a joint news conference with finance ministers from 12 other Asian economies, including Japan and South Korea, but was swamped with Chinese issues as China's central bank announced its lifting of bank reserve requirements just minutes before. [ID:nTOE64100Q]

In contrast to regional neighbours such as India, Malaysia, Vietnam and Australia, China has not resorted to the blunter instrument of higher borrowing costs, not least because it harbours doubts about the solidity of the global recovery.

Underlining the technical nature of Sunday's central bank move, Xie said China was committed to maintaining the appropriately easy monetary policy that it adopted in late 2008 when the international financial crisis was raging.

We don't think the foundation for an economic recovery is not very solid, for which we decide to continue to implement a proactive fiscal policy and a moderately loose monetary policy this year, he said.

Xie and finance ministers from the 12 east Asian economies held the meeting on the sidelines of the Asian Development Bank's (ADB) annual meetings.

Turning to domestic issues, Xie said China's economic growth was now relying mainly on domestic demand, citing the fact that China's gross domestic product rose 8.7 percent in 2009 while exports fell more than 16 percent.

He also reaffirmed that China would focus on economic restructuring this year and seek a balance between growth and managing inflationary expectations. (Editing by Yoo Choonsik, Mike Nesbit)

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