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. Last Updated: 07/27/2016

Kudrin Boosts Yuan As Reserve

The Chinese yuan is likely to become a global reserve currency but not for perhaps another 15 years, as Beijing needs to liberalize its foreign exchange regime first, Finance Minister Alexei Kudrin said Tuesday.

China's growing importance on the world stage could make the yuan an attractive unit for some of its trading partners, but tight currency controls so far make this difficult.

"People are already showing an interest in it, but the regime of its usage does not correspond to the requirements of reserve currencies. There are conversion limitations. At the moment, they can't make it a reserve currency," Kudrin said in informal remarks to fellow CIS finance ministers on the sidelines of a meeting.

"As soon as they liberalize [currency regulations], it will immediately become a global currency. ... It will probably take them 15 years to do it," he said.

Russia has repeatedly expressed its discomfort with the dollar being the world's main reserve currency, although its proposals to turn the ruble into a regional reserve unit have so far made little headway.

This month, Russia and China also began a global debate on the possibility of creating a new international reserve currency, which could take the form of the International Monetary Fund's Special Drawing Rights.