'Talk of China giving up on dollar is nonsense'

Any speculation that China might stop supporting the dollar in the next few years is absolute nonsense, a top state banker said.

Li Ruogu, chairman of Export-Import Bank of China, a lender tasked with supporting the country's foreign investments, said in a group interview that a collapse in the dollar's value would damage Chinese interests.

China should focus on trying to stabilise the dollar and on preserving its status as the leading global currency, said Li, a former deputy central bank governor.

Asked whether China should continue to back the dollar, he said: "I believe that, for now, supporting the dollar's stability and its international currency status is good for China."

He added: "As China has a huge sum of foreign exchange reserves, a dollar collapse would bring nothing good to China."

China has $2.4 trillion (Dh8.8trn) in official reserves, the largest stockpile in the world, and bankers say about two-thirds of the total is invested in dollar assets.

Li said the Special Drawing Right (SDR), the International Monetary Fund's unit of account, presented a viable super-sovereign alternative to the dollar in the long term as a global reserve currency.

 

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