G20 meeting highlights conflicts over currency

NANJING, China: Financial leaders of the Group of 20 economies seemed to reach an informal agreement Thursday on the need of the Chinese currency to have a greater role in global finance, but not as a substitute for the U.S. dollar.

French Finance Minister Christine Lagarde said the one-day meeting of the G-20 agreement should study, including yuan in China in the currency basket that defines the value of the SDR of the IMF, or drawing rights special - a virtual currency established by the IMF, which is used in relations with and among member governments.

"We raised our Chinese friends with the idea of ​​including the yuan, under conditions and deadlines to be agreed," said Lagarde. "From now on we will start working on expanding the basket of currencies." The basket now includes the dollar, Japanese yen, the euro and the pound sterling.

Including the yuan would underscore China's increased influence in the global economy and finance after last year overtook Japan to become the second largest economy. It could also serve as a carrot that other members of the G-20 hope to encourage Beijing to ease controls that limit the appreciation of Chinese currency.

Since the gathering in the eastern Chinese city of Nanking was not an official G-20, there was no formal agreement, "said Lagarde. She also said there was "no suggestion whatsoever that the dollar is replaced by DTS," an option that was raised by China as a way to reduce global dependence on the dollar for trade and as a reserve currency.