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Aso backs dollar centered currency

WASHINGTON, November 16 – Japanese Prime Minister Taro Aso on Saturday voiced his support for the dollar-centered currency system despite growing concern about the troubled global financial mechanism.

"We should firmly maintain the dollar-centered currency system," Aso was quoted by a Japanese government official as telling a global summit on the world financial crisis.

"There is a voice questioning if it\’s stable for the US dollar of the world\’s largest debt country to continue to be a key currency," Aso said.

"But our prime minister stressed that no currency but the dollar can be used as a key currency," the government official told reporters.

Later in the day, Aso urged the United States to make an effort to reduce its mounting debts, while calling on states reliant on exports, including Japan, to lower their dependence on foreign demand.

"It is necessary for the country of a key currency to reverse its chronic state of deficit, and those which heavily rely on foreign demand should try to expand domestic demand," Aso said.

"With such coordination in policies by all the countries, we should make an effort to support the dollar-centered currency system," he added.

Ahead of the summit, French President Nicolas Sarkozy said the US dollar can no longer claim to be the sole world currency, saying: "We cannot continue into the 21st century with a system (established) in the 20th century."

Since the end of World War II, the US dollar has effectively been the world\’s reserve currency, used across the board and thereby giving the United States immense influence in the global economic system.

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But the foreign exchange market has run into turbulence, reflecting recent volatility in global stocks, fuelled by fears of a credit crunch around the world.

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