* G20 source: Several models seen used to screen imbalances
* Source: No single 'magic number' for imbalance thresholds
* Source: Only big economies seen liable for remedial action
* Source: G20 to hold door ajar for yuan joining SDR basket
By Jan Strupczewski
BRUSSELS, April 6 (Reuters) - The world's top economies are likely to set next week a cornerstone of a system for correcting economic imbalances, and open the door to future inclusion of China's renminbi in the SDR currency basket, a G20 source said.
Finance ministers and central bank governors from the 20 biggest developing and developed economies meet on April 15 in Washington to decide, among other things, how to use a list of economic indicators agreed in February to detect worrying trends that could lead to global economic crises.
Setting up the list was tough because China, which manages its currency to help exports and has amassed the world's biggest currency reserves as a result, blocked the inclusion of exchange rates and currency reserves in the set of indicators.
But it does include including public debt and fiscal deficits, private savings and borrowings, and balance of payments components.[ID:nLDE71I02C]
Setting common numerical thresholds for signalling imbalances would have been even more challenging to agree because different economic models give different results.
"There are now four models on the table, one is structural and three are statistical," a G20 source with insight into the preparation of the Washington meeting said.
"If you give countries a choice, they will never agree on the best method, as all have limitations. So what we will try to agree -- and I think it will go through one way or another -- is to use a combination of these methods," the G20 source said.
"I think that we will reach an agreement, we are sufficiently close."
A deal would eliminate the need to agree a single threshold number for an indicator for all G20 countries, which would be politically sensitive for different countries and indicators.
"Within each method of course there will be numbers, but since the methods are different, there will be no single magic number," the G20 source said.
"We would use all the four methods and if two out of the four or two out of three say that a country might show excessive imbalances, then you move to the next stage," the source said.
POLICY RECOMMENDATIONS
The next stage would involve the International Monetary Fund and the country in question analysing the imbalances and proposing remedial action.
G20 countries that would go to the stage of an in-depth IMF analysis and then get policy recommendations would be limited to "systemically important" ones, the source said.
If the screening methods are agreed in Washington next week, the process could start immediately with a view to having the analysis ready for the next G20 ministerial meeting in October.
Ideally, recommendations would be ready for a G20 leaders' summit in November, the G20 source said, noting however, that no timetable has been agreed yet.
G20 finance leaders will also discuss an overhaul of the global monetary system, controls on the flow of capital, financial safety nets, how to identify which financial institutions are too big to fail and liquidity provision.
RENMINBI AND SDR
Part of the monetary overhaul could be to include the currency of the world's now second biggest economy, China, in the basket that makes up the Special Drawing Right (SDR) -- an international reserve asset of the IMF.
Some economists say a bigger base for the SDR could help cut an overreliance on the dollar as the world's reserve currency.
The basket is now made up of four currencies -- the dollar, euro, pound sterling and Japanese yen. Created in 1969 it does not reflect the rising importance of China.
But the United States and Europe say China's renminbi could only become part of the SDR once Beijing allows the market to set the unit's exchange rate.
Since this is unlikely to happen very soon, the source said, the G20 is likely to signal the possibility that the currency might become part of the SDR basket in the future.
"In the G20 conclusions it is likely to be phrased in a more veiled way," the source said.
(Reporting by Jan Strupczewski, editing by John Stonestreet)