Foreign exchange changes urged

The People's Bank of China has called on the International Monetary Fund (IMF) to manage more of member countries' foreign exchange reserves in a bid to reduce the uncertainty of recent months.

In the wake of the global recession, caused by the banking crisis of October 2008, the foreign exchange market has been full of instability and as a result the Chinese financial authorities are eager to see the IMF take a more prominent role in future in an effort to give investors more confidence.

The calls came as the dollar continued to fall, with some experts suggesting that there are still valid question marks surrounding the future of the dollar as the world's reserve currency.

Many experts have predicted that countries including the US and UK are beginning to emerge from the global recession, which could help to increase stability in the foreign exchange rate and encourage more international money transfers.

However, an unexpected increase in unemployment figures in the US published last week had a negative impact on the dollar and could continue to drive uncertainty in the foreign exchange markets for the coming months.

By Paul Jarvis