The People’s Bank of China renewed its call for a new global currency today, calling for the International Monetary Fund (IMF) to manage more of its members’ foreign-exchange reserves, reports Bloomberg News. This announcement, which accompanied the release of the People’s Bank of China 2008 review, caused the U.S. dollar to decline in its biggest weekly loss against the euro in the past month.
The proposal was originally announced in March by Governor Zhou Xiaochuan, adding to speculation that China had plans to diversify its $1.95 trillion in currency reserves, which is the world’s largest.
“To avoid the inherent deficiencies of using sovereign currencies for reserves, there’s a need to create an international reserve currency that’s delinked from sovereign nations,” the review said.
At a meeting June 16 in the Russian city of Yekaterinburg, Russian President Dmitry Medvedev, Chinese President Hu Jintao, Indian Prime Minister Manmohan Singh, and Brazilian President Luiz Inacio Lula da Silva called for a reduction of dependency on the U.S. dollar. U.S. Treasury Department data shows that China reduced its holdings by $4.4 billion to $763.5 billion in April.