Guido Mantega, Brazil’s Finance Minister, suggested the International Monetary Fund (IMF) include China’s yuan and Brazil’s real as conversion currencies for Special Drawing Rights (SDR) of the institution.
Mantega made the suggestion to IMF chief Dominique Strauss-Kahn, who was on a regular visit to the country.
“We believe that our currencies have already become important,” Mantega said at a joint press conference after holding a meeting in Brazilian capital Brasília.
Mantega said the suggestion was not meant to diminish the importance of the US dollar but to increase resource options for the IMF. He also stressed the need to accelerate IMF reforms to give more decision-making powers to developing countries.
“The emerging countries are under-represented in the Fund and the institution recognizes that,” he said. “There is reform forecast for 2011, but we are trying to bring it forward to 2010. It is more than fair that countries adding resources to the IMF have their participation increased.”
Strauss-Kahn said SDR might have a major role in international reserves of the countries, although not in the short term. He believed the US dollar would remain the dominant currency, due to the size of the US economy.
SDR run between central banks and can be cashed with the endorsement of the IMF, but currently only four currencies can be converted: US dollars, Japanese Yen, British pounds and the Euro.