UPDATE 1-China presses developed world on policy after G20

(Adds quotes on policy suggestions, background)

By Langi Chiang

ST ANDREWS, Scotland, Nov 7 (Reuters) - China on Saturday shrugged off international pressure to appreciate its currency, saying developed countries should focus on the quality of their own economic policy-making.

Chinese Finance Minister Xie Xuren, speaking after finance ministers and central bank governors of the Group of 20 nations met in Scotland, said countries with global reserve currencies should work to maintain the currencies' value to avoid destabilising the world economy.

"All countries should pay attention to the sustainability of their fiscal policies and economic growth, and take timely and effective steps to address potential risks, including inflation," China's official Xinhua news agency quoted Xie as saying.

Chinese central bank governor Zhou Xiaochuan said the International Monetary Fund should increase its monitoring of economic policies and financial markets in developed countries, Xinhua reported.

Neither Xie nor Zhou referred to specific developed countries, but in the past China has warned the United States to act responsibly in protecting the value of Beijing's U.S. dollar assets.

The Xinhua report was the first official Chinese response to the G20 meeting, which ended on Saturday.

The meeting's communique did not refer to foreign exchange rates, but officials from several countries, including Japan, Brazil and Indonesia, urged Beijing on the sidelines of the meeting to let the yuan CNY=CFXS move more flexibly.