The China-led Asian Infrastructure Investment Bank is expected to use the U.S. dollar as its currency of settlement, a diplomatic source here said Monday, despite Beijing's ambition for the internationalization of China's yuan.
Fifty-seven countries, including South Korea, became founding members of the AIIB, which is seen as a potential counterbalance to U.S. and Japan-led multilateral lenders such as the Asian Development Bank and the World Bank. The U.S. and Japan did not join the AIIB.
The source, who was involved in the fourth round of a preparatory meeting in Beijing late last month before signing the charter of the AIIB by the end of June, also said the members have agreed to raise an initial capital of the new lender to US$100 billion, compared with an original target of $50 billion.
"There is a consensus among members that the U.S. dollar would be included in the charter as the currency of settlement," the source said on the condition of anonymity.
"From China's point of view, the AIIB is designed to use its huge U.S. dollar-denominated currency reserve," the source said, adding that the Chinese side has no intention of opposing the use of the U.S. dollar as a settlement currency in the AIIB.
From May 20-22, members of the AIIB are scheduled to hold a final round of preparatory meeting in Singapore.
Although no final agreement has yet to be reached, the source said the AIIB's Asian members, including Russia, would have a combined 75 percent stake in the new lender, while the remaining 25 percent would go to non-Asian members.
Russia, which is part of the World Bank and the ADB as a European member, joined the AIIB as an Asian member. (Yonhap)