Chinese currency RMB should be included in the basket of the Special Drawing Rights (SDRs) run by the International Monetary Fund (IMF), French Finance Minister Christine Lagarde said on Friday.

"It is quite bizarre that the Chinese currency is not part of the basket underlining the SDR, because China is the second largest economy power of the world, and first exports of goods and services," Lagarde told reporters on the sidelines of the World Economic Forum (WEF), which kicked off earlier this week in the Swiss ski resort of Davos.

"The SDR should include its basket of currency all relevant currencies, in particular the RMB," she added.

SDRs are international foreign exchange reserve assets. Allocated to nations by the IMF, a SDR represents a claim to foreign currencies for which it may be exchanged in times of need.

Although denominated in U.S. dollars, the nominal value of an SDR is derived from a basket of currencies, specifically, a fixed amount of Japanese yen, U.S. dollars, British pounds and euros, without the RMB.

France, which holds the presidency of the Group of 20 major economies (G20) this year, has put reform of the international monetary system high on its agenda, in a clear move to contest the dominance of U.S. dollar.

The U.S. dollar is the world's primary foreign exchange reserve asset and SDRs may be little used. It had been proposed that the substance and function of the SDR may be increased to work as an alternative to the U.S. dollar.

But Lagarde denied that the reform of the international monetary system was intended to weaken the U.S. dollar.

"We make it very clear in the beginning of the discussion that it is not about the decline of the U.S. dollar, the U.S. dollar is an important currency, the leading currency at the moment," she said. "Yes, the role of the dollar was declining in the last 10 years, and probably it will continue to do so, but it will remain a key currency."

Lagarde suggested France preferred a gradual departure from the current system dominated by the U.S. dollar, rather than abrupt change.

"The transition should be managed and monitored, so there is no violent transition," she said.

(Xinhua News Agency Anuary 29, 2011)