The dollar has been the world's reserve currency for decades

China's central bank has reiterated its call for a new reserve currency to replace the US dollar.

BBC NEWS

The report from the People's Bank of China (PBOC) said a "super-sovereign" currency should take its place.

Central bank chief Zhou Xiaochuan has loudly led calls for the dollar to be replaced during the financial crisis.

The bank report called for more regulation of the countries that issue currencies that underpin the global financial system.

"Aninternational monetary system dominated by a single sovereign currencyhas intensified the concentration of risk and the spread of thecrisis," the Chinese central bank said.

The dollar fell afterthe report was released. The US currency dropped 1% against the euro to$1.4088, and declined 0.8% versus the British pound to $1.6848.

SDRs

MrZhou caused a stir earlier this year when he said the dollar couldeventually be replaced as the world's main reserve currency by theSpecial Drawing Right (SDR), which was created as a unit of account bythe IMF in 1969.

CURRENCY RESERVES Foreign currency held by a government or a central bank Used to pay foreign debt obligations or influence exchange rates The dollar is viewed as the world's reserve currency as the vast majority of reserves are held in the US currency Smaller amounts are held in euros, pounds and yen Dollar poses dilemma for China

The PBOC said in the report that not only should the world adopt theSDR, but that the IMF should be entrusted with managing a portion ofits member countries' foreign currency reserves.

"To avoidintrinsic shortcomings in using a sovereign currency as a reservecurrency, we need to create an international reserve currency that isdivorced from sovereign states and can maintain a stable value over thelong term," the PBOC report said.

It also issued some veiledcriticism of the US policies, saying that one of the major issues wasthat it was difficult to balance the needs of domestic politics withthe requirements of being the world's reserve currency.

"The economic development model of debt-based consumption is most difficult to sustain," the PBOC said.

RussianPresident Dmitry Medvedev recently joined Mr Zhou in saying it was timeto consider an alternative benchmark currency for international debt.

But Russian finance minister Alexei Kudrin then said "it's too early to speak of an alternative".