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UPDATE 2-BRIC may discuss supranational currency-Kremlin

Published 06/02/2009, 11:17 AM
Updated 06/02/2009, 11:26 AM

* Kremlin seeking reserve currency debate

* BRIC summit planned for June 16

* Russia still keen to see rouble a regional reserve unit

(Adds Pankin comments)

MOSCOW, June 2 (Reuters) - The leaders of the world's biggest emerging markets may discuss the idea of a supranational currency this month when they meet for a summit in Russia, President Dmitry Medvedev's spokeswoman said on Tuesday.

Reserve currencies also remain a theme for the upcoming G8 and G20 meetings, said deputy finance minister Dmitry Pankin.

"I do not exclude that the Russian president's idea about the creation of a supranational currency and the rouble as a (world) reserve currency will be discussed," Medvedev's spokeswoman, Natalya Timakova, told reporters.

When asked if the summit would include a discussion of ways to reduce dependence on the dollar, she said: "If one of the (BRIC) participants raises this question then I do not exclude it" (a discussion).

Russia has proposed the creation of a new world reserve currency that would be issued by international financial institutions to reduce reliance on the U.S. dollar.

In recent years, Moscow has reduced the dollar's role in its reserves, the world's third largest, has shifted its foreign exchange policy focus to a euro-dollar basket, has repeatedly called for the use of national currencies in bilateral trade and has suggested the rouble as a regional reserve unit.

"We have reasons to use the rouble more widely for transactions between CIS countries, in the post-Soviet space, which could gradually evolve into a regional reserve currency," Pankin told a news briefing.

"We need to start with using it in transactions where there is the biggest weight of bilateral transactions."

The leaders of Brazil, Russia, India and China, known by the BRIC acronym, will meet in the Russian city of Yekaterinburg on June 16 for the first summit since the international downturn struck their economies, which had driven global growth.

The BRIC states are trying to strengthen their clout as the producers of 15 percent of global output by building up the grouping into a powerful world player.

A Brazilian official told Reuters last week that the summit would discuss the dominance of the U.S. dollar as well as ways to reshape the world trade system and nuclear disarmament.

"The agenda of the BRIC summit is still being finalised but naturally questions connected with the world economic crisis and proposals from all the BRIC countries about ways to move out of the crisis will be discussed in very great detail," said Timakova. (Reporting by Guy Faulconbridge and Toni Vorobyova, editing by Dmitry Zhdannikov and Stephen Nisbet)

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