Financial Regulatory Forum

EU central banker Noyer wants more balanced currency system

By Reuters Staff
October 13, 2009

European Central Bank board of governors member and Bank of France Governor Christian Noyer, June 25, 2009. (File Photo)  REUTERS/Benoit Tessier ROUEN, France, Oct 13 (Reuters) – Having a more balanced world currency system is a good idea but Special Drawing Rights are not an instrument that can replace the U.S. dollar, ECB governing council member Christian Noyer said on Tuesday.

Asked about the desire of some emerging market countries to use the SDR as a key reserve currency that could one day replace the U.S. dollar, Noyer told a news conference: “It’s not an idea that I can get very far with.”

He said the International Monetary Fund’s SDRs, which are based on a basket of currencies, were not very convenient because they can only be traded among central banks and that other currencies would eventually play a more important role.

“The idea of having a more balanced international monetary system and less focused on the dollar is a strong idea and is making some progress,” he said.

He noted along with the U.S. dollar, the euro had become a more important reserve currency in recent years, and the Japanese yen also retained a key position.

He said that China also hoped the yuan would become a reserve currency but added: “It will only be one day if they accept the free convertibility of their money.”

(Reporting by Anna Willard; Editing by Sophie Hardach and Tamora Vidaillet) ((Reuters Messaging: anna.willard.reuters.com@reuters.net; Tel: +33 1 49 49 5339; anna.willard@thomsonreuters.com))

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