China Discusses Reserves at IMF Meeting, EmergingMarkets Says

By David Yong

Oct. 6 (Bloomberg) -- China is holding talks with the International Monetary Fund concerning the management of global currency reserves, EmergingMarkets magazine reported, citing Liu Mingkang, chairman of China Banking Regulatory Commission.

The government and the People’s Bank of China are having some “good conversations with the IMF” at its annnual meeting in Istanbul regarding the reserves issue, the magazine cited Liu as saying in an interview. Liu declined to comment on the possible outcome, the magazine said on its Web site.

The IMF’s steering body, the International Monetary and Financial Committee, has explored the idea of offering pooled currency reserves instead of having countries stockpile them, Managing Director Dominique Strauss-Kahn said on Oct. 4. People’s Bank of China Governor Zhou Xiaochuan urged the IMF in March to create a “super-sovereign reserve currency.”

Some countries may prefer to create regional pools of reserves instead of a global one managed by the IMF because of bureaucratic and political hurdles, the magazine said, citing Mexican central bank Governor Guillermo Ortiz and his counterpart in Brazil, Henrique Meirelles.

The plan won’t solve global financial imbalances and the U.S. veto power would be an obstacle to countries entrusting their reserves to the IMF, the report said, citing former World Bank chief economist Joseph Stiglitz.

To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net.