BEIJING, Feb 25: European Central Bank (ECB) president Wim Duisenberg on Monday began a trip to China by pushing the case for the euro to the country with the world’s second largest foreign currency reserves.

In a speech to a conference in Beijing organized by China’s central bank, the People’s Bank of China, Duisenberg said the euro was not only deepening financial integration in Europe but also having consequences outside the euro zone.

In other countries, “the euro is not only used by private agents but also by the official sector”, Duisenberg told his hosts.

“In particular, more than 50 countries currently maintain an exchange rate regime involving an external anchor in which the euro plays a role,” he said.

The euro accounts for 13 per cent of official currency reserves, Duisenberg said, while acknowledging this was a long way behind the US dollar, which is 66 per cent of global reserves.

But Duisenberg said the ECB itself contributed to this by holding a large amount of dollar foreign reserves.

He added the current share of the euro in international reserves was comparable with the share reached by the euro zone’s former currencies prior to the introduction of the euro.

The ECB head arrived in Beijing on Monday for a four-day trip, which European diplomatic sources had predicted would be used to promote the euro to China, which has foreign currency reserves of $217 billion.

Duisenberg was also holding talks with Dai Xianglong, governor of the People’s Bank of China, a People’s Bank spokesman said.

Most of China’s foreign currency is held in US dollars, but Dai told reporters in January that the euro was now the second largest currency in its reserves, although he did not provide details.—AFP