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UPDATE 1-No plans for new currency discussion at G20-Russia

Published 08/25/2009, 11:38 AM
Updated 08/25/2009, 11:42 AM
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By Toni Vorobyova

MOSCOW, Aug 25 (Reuters) - There are no plans for separate discussion of the possible creation of a new international currency at next month's meeting of G20 finance ministers, Russian deputy finance minister told Reuters on Tuesday. The idea of a new currency -- which could offer an alternative to the dollar for global reserve holders -- has been mooted by Russia and China.

"There are no special discussions planned on this issue (at the G20)," Dmitry Pankin said, adding that regulation of world oil prices also does not feature as a special item on the agenda.

Pankin said the Sept. 4-5 meeting in London would likely focus on progress that had been made on the decisions of the previous summit, rather than on any new proposals.

China and Russia -- which hold, respectively, the worlds first and third biggest reserves -- have suggested that a new global currency could be based on the International Monetary Fund's Special Drawing Rights (SDRs).

IMF officials have said that in theory such a move could be possible, but it would take a long time. The SDRs are the IMF's unit of account, their value is based on a basket of currencies including the dollar, Japanese yen, British pound and euro.

Major emerging market economies, such as Russia, would like to see the SDR basket widened to include their national currencies and possibly other assets such as gold.

Russia has lessened its own dependence on the dollar in recent years, with the U.S. currency now accounting for less than half of its reserves and the rouble exchange rate tracked versus a euro-dollar basket.

Brazil, Russia, India and China are once again likely to issue a separate communique after their representatives meet during the G20 summit, Pankin said.

The so-called BRIC countries issued their first ever communique at the March G20 finance ministers' meeting in Horsham, England. Then they called on international financial agencies to step up lending to compensate for the flight of private capital.

But a debut BRIC summit in the Russian city of Yekaterinburg in June was a muted performance despite advance bluster about challenging the financial status quo, leaving some analysts to wonder whether the foursome will be able to agree on a common agenda in the future. (Reporting by Toni Vorobyova; Editing by Andy Bruce)

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