China's deputy bank governor predicts bigger share of euro in world reserves
1/6/2007 16:03
The euro is set to play a bigger role as a reserve currency for
central banks, Wu Xiaoling, deputy governor of the People's Bank of China, said
yesterday.
Wu, in her address to the eighth Brussels Economic Forum, said
that when a country decides the structure of its foreign reserves, the choice
normally relies on which states the country is going to deal with and the
strength of the potential reserve currency.
"With the economic development of
the European Union and the stability of the euro, the increasing proportion of
euros in reserves of central banks is an inevitable trend," Wu said.
Wu noted
that her words were only her observation of the market, so it may not mean the
Chinese central bank is about to cut its US dollar reserves in favor of the
euro.
"World markets should not be worried about the sharp decrease of dollar
reserves in exchange for a bigger share of the euro," she said.
Wu also said
that a stable euro would help maintain stability of the world monetary system
since it is preferable to have more than one kind of settlement currency for
international transactions.
Xinhua
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