Oct. 19 (Bloomberg) -- A wider use of emerging markets’ currencies including China’s yuan could benefit the global monetary system, International Monetary Fund economists said.
The key emerging markets’ currencies that have potential for internationalization besides the yuan are the Brazilian real, the Indian rupee, the Russian ruble and the South African rand, IMF staff wrote. A multipolar system may help diversify risks, according to the report.
“This process, however, will require deeper financial markets and further progress to reform and liberalize the capital account, along with other macroeconomic and structural policies,” according to the report.
French President Nicolas Sarkozy has been trying to coax China into accepting a greater role for its currency during France’s chairmanship of the Group of 20 nations that will culminate in a summit in Cannes in November. The discussions are part of efforts to limit global economic imbalances and avoid another financial crisis.
--Editors: Kevin Costelloe, Gail DeGeorge
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