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World wants “major reserve currencies” stable

One of the lessons that the global financial crisis has taught the world is that the top reserve currencies should be kept stable, Chinese Foreign Minister Yang Jiechi said.

“Countries across the world have suffered heavy losses from the ongoing global financial crisis and economic recession,” Yang told a UN General Assembly meeting on the economic crisis and its impact on the developing world.

“One important consensus we have reached upon reflection is that is that it is important to keep the exchange rates of major currencies relatively stable and promote a diversified and rational international monetary system,” he said.

China suggested in March that the International Monetary Fund's Special Drawing Rights, or SDRs, could play a role as a future reserve currency, which would lessen the reliance on the US dollar as the world's top reserve unit.

Beijing, however, has not been as outspoken on the issue as Moscow, which caused the US dollar to weaken against other major currencies last week after it indicated there was a need for a global reserve currency other than the greenback.

The SDR is an international reserve asset allocated to IMF member countries with its exchange rate determined by a basket of currencies, at the moment including the dollar, euro, yen and sterling. A review of the basket is due in late 2010. (Reuters)