The dropping trend in China's foreign exchange reserve is a normal phenomenon. [Photo / Xinhua]

The dropping trend in China's foreign exchange reserve is a normal phenomenon, the country's central bank chief said Friday.

"China does not want that much forex reserve," Zhou Xiaochuan, governor of the People's Bank of China (PBOC), said at a press conference on the sidelines of the annual parliamentary session.

He said the forex reserve had seen fast expansion since 2002, which China deems to be unnecessary.

In the meantime, China sees no need in its policymaking to overreact to the large stockpile, Zhou said.

Since the global financial crisis, capital flow from developed countries implementing monetary easing policies to emerging markets had surged significantly, Zhou said.

The capital influx lacks stability and may flow back with the recovery of those developed economies, he added.

China still holds the largest forex reserve stockpile in the world, much higher than the runner-up, the governor said.

China's outstanding forex reserve stood at a little more than 3 trillion U.S. dollars by the end of last month, down from near 4 trillion dollars in 2014, PBOC data showed.