China cbank chief sees need for systemic monetary reform

Reform of the international monetary system is needed to prevent foreign assets flooding to one particular currency, the head of the People's Bank of China said on Friday.

A reform of the international monetary system is in order so as to prevent the over concentration of foreign assets in one particular currency, central bank chief Zhou Xiaochuan wrote in a brochure released at a conference in Paris where he will speak later with his counterparts from the United States, Japan, euro zone and Britain.

Zhou also said calls for exchange rate adjustments would have no impact on savings behaviour.

A G20 policymakers' meeting on Friday and Saturday is charged with tackling global imbalances marked by China saving and exporting and the United States borrowing and consuming.

High savings in East Asia can mainly be explained by cultural and structural factors in nature, Zhou said. Simple adjustments in nominal exchange rate cannot influence savings behaviour.

Options for adjusting savings ratios ... include a switch to a more balanced growth pattern, enhanced regulation of the international speculative capital flows and channeling of more savings into developed countries and emerging markets, he said.

Washington has been trying to prompt China into letting the yuan rise more swiftly, something Washington says is vital for rebalancing global growth.