China urges IMF to embrace currencies
Shanghai - The IMF should consider including currencies of the Brics countries and other emerging economies when it next reviews its Special Drawing Right (SDR) system by 2015, the head of China's foreign exchange authority said in remarks published on Thursday.
Yi Gang, who is also a deputy governor of the People's Bank of China (PBOC), called on the International Monetary Fund to kick off a research of a "shadow SDR" this year, the semi-official China Business News reported.
The IMF should then be able to accumulate enough data to consider whether currencies of major emerging economies, such as those of the Brics countries, could be added to the SDR basket by 2015, the newspaper quoted Yi as saying in a lecture at Peking University this week.
"We propose to the IMF to adjust its SDR currency basket by 2015 at the latest when it reviews the basket next time," Yi, head of the State Administration of Foreign Exchange, was quoted as saying.
The SDR, the IMF's internal accounting unit and reserve asset, comprises the US dollar, British pound, euro and Japanese yen. Chinese officials have asserted that widening the basket to include currencies such as China's yuan, would heighten its profile as a potential reserve currency.
Calls by Chinese officials for inclusion of the yuan in particular to the SDR are not new. In March 2009, PBOC governor Zhou Xiaochuan first sketched out China's long-term ambition to supplant the dollar with a super-sovereign currency akin to the IMF's SDR and implied that the yuan could be one of its constituents.
Some commentators have called Zhou's vision naive, partly because the yuan is not freely convertible nor is its value determined solely by markets since Beijing manages it closely.
But with emerging markets projected to post stronger growth while developed countries struggle with mounting debts, the political clout of the Brics countries has increased.
Meeting in the southern Chinese island of Hainan last month, leaders of the BRICS countries - Brazil, Russia, India, China and South Africa - called for a revamped global monetary system that relies less on the dollar.
Yi, whose comments appear to elaborate on Zhou's initial proposal, said that China is patient.
"China is in no hurry as the SDR has so far been only a symbolic currency basket," Yi was quoted as saying.
"Still, the SDR is a symbolic arrangement of international currency system, and only widely used currencies of the world's most powerful trade nations should be included," he said.
Yi named currencies of Saudi Arabia, South Korea and Australia among other nations that have the potential to be included in the SDR, the China Business News reported