New World Currency discussion at G20 Summit in London

BEIJING, March 23 (RIA Novosti) - China is ready to discuss Russia's proposal of a new global reserve currency as an alternative to the U.S. dollar at the G20 summit in London, a vice governor of the country's Central Bank said on Monday.

Russia earlier submitted a proposal to the G20 summit which could see the IMF examining possibilities for creating a supra-national reserve currency, and also forcing national banks and international financial institutions to diversify their foreign currency reserves.

"We believe it is necessary to consider the IMF's role in this process and also define the possibility and the need to adopt measures allowing for Special Drawing Rights (SDRs) to become an internationally recognized super-reserve currency," Russia's proposal read.

Hu Xiaolian said that China, which holds about $2 trillion in foreign exchange reserves, was prepared to debate the issue as "the dollar's dominance and U.S. economic woes could entail considerable currency fluctuations and affect the world financial situation."

At the same time, she said that discussion into a new global currency could be started but considering the dollar's status as the current primary currency, "we should focus more on enhancing control over the existing system."

The G20 summit, involving advanced and emerging economies and international financial institutions, will be held in London on April 2, aimed at finding ways to overcome the ongoing global financial crisis.

During the G20 summit, Chinese President Hu Jintao will meet Russian President Dmitry Medvedev and U.S. President Barack Obama, Chinese Deputy Foreign Minister He Yafei said.

Yafei also said that Jintao will address the summit outlining measures to stabilize the global financial markets, reform the international financial system and harmonize macroeconomic regulation standards.
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World Bank all but declares 2009 the Second Great Depression.

World Bank: 2009 Will Be “Very Dangerous” Year

In other economic news, World Bank President Robert Zoellick warned the entire globe will feel the effects of the economic meltdown this year.

Robert Zoellick: “Well, I think 2009 is going to be a very dangerous year. And just to give you some reference points, the IMF came out with a new global forecast recently, close to decline of about one percent of growth. We at the Bank will be coming out with ours soon, and it will probably be in the range of one to two percent. But to put that number in a context, you haven’t seen a figure like that globally since World War II, which really means since the Great Depression.”

The World Bank also warned over the weekend that a wave of social and political unrest could sweep through the world’s poorest countries if G20 leaders fail to come to their aid. A new report from the Overseas Development Institute said the collapse of the global economy would cost 90 million lives, lead to an increase to nearly a billion in the number of people going hungry, and cost developing countries $750 billion in lost growth.