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PBOC wants to rely less on a few reserve currencies

Published 06/26/2009, 05:59 AM
Updated 06/26/2009, 06:08 AM

BEIJING, June 26 (Reuters) - China will push for the international community to reduce its over-reliance on a small number of reserve currencies, the People's Bank of China said on Friday.

In its annual financial stability report, the central bank said it was a serious defect that the international monetary system should be dominated by one currency, a veiled reference to the dollar.

And in a coded call for the United States not to erode the value of the dollar through excessively loose monetary and fiscal policies, the PBOC urged closer supervision of those countries that issue the main reserve currencies.

The report reiterated a call by central bank governor Zhou Xiaochuan for the creation of a super-sovereign currency.

In an essay in late March, Zhou said the role could be played by the Special Drawing Right, the International Monetary Fund's unit of account.

The IMF should also be entrusted with managing a portion of its member countries' foreign currency reserves, the report said.

The bank released a summary of the report on June 19 [ID:nPEK107283] (Reporting by Zhou Xin, Aileen Wang and Alan Wheatley; Editing by Chris Lewis)

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