SINGAPORE Major Asian central banks will continue to lift the proportion of euros in their bulging reserves after it reached parity with the dollar but analysts said the move would be gradual.

Nevertheless, the dollar will continue to be the dominant currency in Asian reserves, reflecting the United States role as asia's dominant trading partner and expectations that the U.S. economy will outperform Europe in the long run, they added.

Major Asian economies such as Japan, China, Taiwan, Hong Kong and Singapore hold reserves larger than other major global economies and can have a major impact on global currency markets.

For the first time in two years, the euro's value passed the dollar this week but economists said there remains a wariness about the underlying strength of the euro. Its recent advance has been more due to dollar weakness -- reflecting a crisis of confidence in corporate America -- rather than any inherent strength in the euro.

Asian economies have been raising the euro portion of their reserves since the unit was introduced in 1999 but they are unlikely to desert the dollar, said Song Seng Wun, a Singapore-based regional economist with GK Goh Research PTE. Ltd.

"I don't think they are going to switch immediately to make the euro the dominant currency," he told AFP. "The U.S. dollar is still the major global currency and it will will continue to be a major part of the overall portfolio. But at the same time there will be gradual moves to raise euro reserves, rather than sudden."

An unnamed foreign currency dealer in Taipei said Taiwan has gradually raised its euro holdings to about 35 percent of total reserves, up from 20 percent.

The U.S. dollar component fell from 65 percent to 50 percent, the dealer said with Taiwan's foreign exchange reserves standing at $148.24 billion at end-June.

Economists estimate a third of Singapore's $80 billion reserves are held in euros, although like most other central banks, the monetary authority of Singapore has kept the exact proportion under wraps.

Wang Chunhong, spokeswoman for the state administration of foreign exchange in Shanghai, said China is likely to "make some adjustment" to its foreign reserves composition.

Eddie Lee, a regional economist with DBS Vickers Securities in Singapore, said any sudden switch by central banks would spark instability in the financial markets.

"It will be gradual. I would not like to see it happen in the immediate term because this would signal to the market that Asian central banks are selling dollars.

"I don't think it's a wise move because that would seen as shooting their own foot," he said.

Any further major decline in the dollar would affect the value of reserves and add to emerging problems of Asian export competitiveness being eroded as their currencies rise against the U.S. dollar.