Japan's Aso Says Dollar Should Remain World's Reserve Currency

By John Brinsley

Nov. 15 (Bloomberg) -- Japanese Prime Minister Taro Aso told global leaders the U.S. dollar needs to remain the world's reserve currency, in contrast to suggestions by French President Nicolas Sarkozy that there are alternatives.

``We said we need to support the dollar-centered currency system,'' Aso said at a news conference in Washington after the Group of 20 meeting.

Sarkozy, who argues that the international financial turmoil calls for restructuring global systems, today told reporters that ``you can't talk world governance without talking currencies. The euro doesn't exist? The yuan doesn't exist?'' He spoke after leaders agreed to work together to stabilize financial markets and boost global growth.

Aso also said Japan pledged to provide as much as $100 billion from its foreign-exchange reserves to the International Monetary Fund for emergency loans to developing countries. Similar donations from other countries with large currency reserves such as China and those in the Middle East would be welcome, he said.

``Just because no one else pledged any money at this meeting doesn't mean they won't go home and talk about it,'' Aso said. Japan yesterday pledged $2 billion to a World Bank fund intended to help recapitalize struggling banks in developing countries.

Japan's $955 billion in foreign-exchange reserves are second only to the $1.9 trillion held by China.

To contact the reporter on this story: John Brinsley in Washington at jbrinsley@bloomberg.net