Zoellick Says China May Diversify Currency Reserves
June 8, 2009 by admin · Leave a Comment
World Bank President Robert Zoellick said China may seek to diversify its foreign currency holdings over time, moving away from U.S. dollar reserves.
“Over time I could see China moving to some further diversification of its reserves,” Zoellick said at a conference today in Montreal. Still, he said, “China has been very sensitive about maintaining its exchange rate versus the dollar. You cannot do that unless you are buying dollars.”
People’s Bank of China Governor Zhou Xiaochuan in March urged creation of a “super-sovereign reserve currency” after Chinese Premier Wen Jiabao said he’s “worried” a weaker dollar might hurt China’s investment in U.S. Treasuries. Zhou proposed using the International Monetary Fund unit of account, known as “special drawing rights,” as an alternative. Read more about China…
