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Reuters Summit-JBIC Watanabe: dlr should remain key currency

Published 07/07/2009, 05:17 AM
Updated 07/07/2009, 05:25 AM

TOKYO, July 7 (Reuters) - The dollar should remain the main reserve currency for the time being as the world has no alternative to replace it, the head of the state-backed Japan Bank for International Cooperation said on Tuesday.

"I don't think the euro has already got a position to become a key currency in the very short term," Hiroshi Watanabe, president and chief executive of JBIC, said at the Reuters Japan Investment Summit.

"The dollar should remain the key currency for the time being. But we have to admit that the dollar is over its peak as the key currency."

Watanabe served as Japan's top financial diplomat for three years to July 2007.

China has been vocal about the idea of adopting an alternative reserve currency, but Watanabe said Beijing was not seriously thinking about changing the global currency system in the near term.

China holds more U.S. Treasury debt than any other country and has expressed fears that Washington's huge spending on economic stimulus programmes could spark inflation, hurting the value of China's dollar-denominated reserves. (Reporting by Chikafumi Hodo, Tetsushi Kajimoto and Kevin Plumberg; Editing by Hugh Lawson)

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