WASHINGTON, April 21 (RIA Novosti) - Russia cannot consider the dollar as a reliable reserve currency because of its instability, the finance minister said Friday.
WASHINGTON, April 21 (RIA Novosti) - Russia cannot consider the dollar as a reliable reserve currency because of its instability, the finance minister said Friday.
Dollar too unstable to be reliable - Russian minister
"This currency has devalued by 40% against the euro in recent years," Alexei Kudrin told a news conference in Washington on the occasion of the opening spring session of the International Monetary Fund.
According to the Central Bank of Russia, the dollar accounted for 70% of Russia's gold and currency reserves, euro for 25% and other assets for 5% in late 2005. As of April 14, 2006, the reserves were $212 billion.
- Russian minister
21:25 | 21/ 04/ 2006
"This currency has devalued by 40% against the euro in recent years," Alexei Kudrin told a news conference in Washington on the occasion of the opening spring session of the International Monetary Fund.
According to the Central Bank of Russia, the dollar accounted for 70% of Russia's gold and currency reserves, euro for 25% and other assets for 5% in late 2005. As of April 14, 2006, the reserves were $212 billion.
http://en.rian.ru/russia/20060421/46778404.html
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Watch the dollar, not the yuan, Zhou says
Chinese central banker defends right to choose currency regime
By Rex Nutting, MarketWatch
Last Update: 7:18 PM ET Apr 22, 2006
WASHINGTON (MarketWatch) - A top Chinese official said Saturday the dollar represents a greater risk to the global economy than the yuan does.
Rather than monitoring the yuan, global financial institutions should watch the U.S. dollar, said Zhou Xiaochuan, the governor of the Peoples' Bank of China.
Later in an interview, Zhou said the yuan could rise at a faster pace, but that's not the Chinese way of economic reform.
"Probably it could be a little bit faster but it is not the way of Chinese reformers to do things," Zhou said in the interview. See full story.
Chinese reforms must be "gradual" to balance competing interests and insure that the financial sector is strong enough, Zhou said.
He hinted that the Chinese could speed up the pace of appreciation in six months after more study about the impact that it's had on the economy.
"Global trade, settlements and reserve assets are heavily reliant on a single currency," Zhou said in remarks to the International Monetary Fund. "The fund should give priority to establishing a surveillance and check-balance mechanism of the major reserve currency countries."
"Favorable conditions in the financial markets do not rule out the possibility of a sudden reversal in sentiment," Zhou said. The lack of coordination in the G7 on monetary policy "could result in large and volatile movements of financial markets."
"We cannot ignore the risk of disorderly adjustments in financial markets," Zhou said.
Coming a day after the Group of Seven singled out China for its inflexible foreign exchange rate, Zhou said it is up to the developed nations to use this period of strong growth to restructure their own economies to rebalance global trade and capital flows and to damp protectionism.
"In particular, the developed countries, while enjoying low-cost imported goods and services, have to restructure their industrial sectors quickly to create job opportunities and export advantages to improve their competitiveness and dampen protectionism," Zhou said in prepared remarks to the International Monetary Fund's policy-making committee.
For its part, China has moved to "expand domestic demand, encourage consumption, open its markets, improve the exchange rate regime and restructure trade," Zhou said.
On Friday, the G7 addressed growing global imbalances in trade and capital flows, suggesting that China in particular should adopt a more flexible exchange rate. The United States has complained that the Chinese have kept the yuan's value low to promote exports. See full story.
"We don't worry too much what other people say," Zhou said in the interview.
The G7 also said their own nations should restructure their economies to help right the imbalances. See related analysis.
In his remarks, Zhou defended the yuan, saying IMF currency surveillance is welcomed within the fund's objective of promoting stability and respecting the autonomy of its member countries.
"Each country is entitled to choose an exchange rate system consistent with its own economic development," he said. He defended the progress on making the yuan more flexible.
Because China's markets and institutions are still developing, "it is hard to obtain a dependable estimate of their equilibrium exchange rate levels," he said.
http://cbs.marketwatch.com/News/Stor...25A%7D&symbol=
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