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G20 in Nanjing

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China may have a role in reforming the International Monetary System. you will see it in this week’s G20 monetary seminar in Nanjing. The G20 is to study whether to include the Chinese yuan within the basket of currencies that make up the IMF's Special Drawing Right.

The Special Drawing Right, or SDR, is a quasi currency used within the IMF by its member countries.
Some economists believe the SDR could one day become a global reserve currency alongside the US dollar.

French President Nicolas Sarkozy, speaking at this summit in Nanjing,  suggested that given the importance of emerging economies such as China to global growth, their currencies should be added to the SDR basket.

"Without rules and supervision, the world runs the risk of being condemned to increasingly serious and severe crises," said President Sarkozy.

"It is clear that we must evolve toward a more flexible exchange rate system that will allow us to withstand shocks," he added.

US Treasury Secretary Timothy Geithner backed the idea and said he supported a change to SDR composition.

"Over time, we believe that currencies of large economies heavily used in international trade and financial transactions should become a part of the SDR basket," he said.

We will see what will happen in the future.