Emerging Asia's reserves soared 170 billion dollars in 2002 to about one trillion dollars, according to an International Monetary Fund study in the twice-yearly World Economic Outlook report.

The buildup accelerated this year, with Chinese reserves alone leaping 60 billion dollars in the first half of 2003.

The expansion in reserves in Asia until 2002 could be explained by basic economics, including the need to cushion against shocks after the 1997 financial crisis, IMF chief economist Ken Rogoff said.

But since then the pace had sped to beyond anything warranted by the economy, resulting in a mountain of reserves, which created new risks, he told a telephone news conference.

"It is one thing to save for a rainy day, but one trillion dollars in reserve accumulation looks more like building Noah's Arc," Rogoff said.

According to the IMF study, a basic rule of thumb showed that countries' foreign exchange reserves can help shield their economies from shocks if the reserves are at least equal to short-term debt.

But in emerging Asian economies, the reserves were now more than five times the level of short-term debt.

"Some slowdown in the rate of accumulation may now be desireable," the IMF report said.

Most of the Asian reserves were held in low-interest bearing loans to industrialized nations such as US Treasury bonds.

This was "an awfully expensive insurance policy" when emerging Asian governments typically had much higher interest paying loans of their own on the markets, Rogoff said.

"Some day, Asian central banks may wake up to their massive unproductive reserve assets and begin to diversify more, out of dollars, and possibly out of cash altogether," he warned.