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UPDATE 1-India open to discussing dollar's status as reserve

Published 07/06/2009, 08:54 AM
Updated 07/06/2009, 08:57 AM

(Adds details, background)

NEW DELHI, July 6 (Reuters) - India is willing to discuss proposals to replace the U.S. dollar as the global reserve currency, Foreign Secretary Shivshankar Menon said on Monday.

"This would be one of the ideas which is on the table. There have been ideas expressed and we are ready to discuss all of them," Menon told reporters when asked if India would consider replacing the dollar.

China has asked for a debate on a new global reserve currency when leaders from the Group of Eight (G8) meet with the G5 emerging economies next week in Italy, G8 sources told Reuters.

China wants an eventual, if gradual, overhaul of the dollar-dominated system. [ID:nPEK337501]

France and Russia on Sunday said they also wanted a discussion about the world's reserve currencies at the summit. [ID:nL691330]

Last week, the chairman of the Indian prime minister's economic advisory council, Suresh Tendulkar, said the dollar's weight in the basket of currencies that helps set the rate of India's partially convertible rupee currency could be reduced. [ID:nL3129175]

He said the Indian central bank was responsible for any change but he believed such a move was possible. (Reporting by Krittivas Mukherjee; Writing by Bryson Hull; Editing by Toby Chopra)

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