BEIJING, Oct 19 (Reuters) - The dollar's status as the world's main reserve currency could be eroded by economic woes, but other currencies remain far from being able to challenge its dominance, China's top official newspaper said on Monday.
The commentary in the People's Daily, the official newspaper of China's ruling Communist Party, echoed recent statements from the country's officials who have voiced worry that a weakened dollar could cut the value of their own huge foreign exchange reserves.
However, it also voiced scepticism about the euro's potential, saying it could be impeded by problems in the European economy, including high unemployment and disparate economic cycles among euro-zone countries, which can undermine unified fiscal and monetary policies.
The commentary said some observers believe a relative decline in the reserve currency status of the U.S. dollar is unavoidable, given the United States' lagging productivity growth relative to emerging economies and its current account and fiscal deficits.
"If the dollar enters into a bear market of sustained depreciation, its status as a principal international reserve currency will weaken," said the commentary.
But it also stressed that it will take a long time before any other currency stands a chance of displacing the dollar.
"In sum, before the birth of new currencies that can displace the dollar, it will retain its dominant status in the international monetary system," it said.
China stands to lose a lot from any decline in the dollar's value, as an estimated two-thirds of its $2.1 trillion stockpile of foreign exchange reserves, the world's biggest, are held in dollar-denominated assets.
The commentary did not mention the possible future role of China's own yuan currency. Nor did it mention the idea that China raised earlier in the year of eventually using the International Monetary Fund's "special drawing rights", a unit of account based on a basket of currencies, as a super-sovereign global reserve currency.
But it said that in the long term, the global monetary system will become more diverse, with the euro and currencies of emerging economies potentially assuming bigger reserve roles.
"The international monetary system will become more balanced, so that a multi-polar pattern emerges with the dollar, euro and emerging country currencies co-existing," it said.
The paper said the commentary was written by Zhang Ming.
It did not give the author's background, but the author may be an economist at the Chinese Academy of Social Science who shares that name. (Reporting by Chris Buckley; Editing by Ken Wills)