Chinese central bank governor Zhou Xiaochuan on Saturday called for broadening the use of the International Monetary Fund (IMF)'s basket of reserve currencies to advance the reform of the International Monetary System (IMS).

"The IMS has inherent deficiencies and faces new challenges from globalization, financial innovation, and volatility in capital flows," Zhou said in a statement for the meeting of the International Monetary and Financial Committee (IMFC), the IMF's policy setting committee, on the sidelines of the spring meetings of the IMF and the World Bank.

"The SDR has the potential to resolve the existing deficiencies in the IMS," Zhou said, referring to the Special Drawing Right, an international reserve asset created by the IMF in 1969.

The value of the SDR is currently based on a basket of four major reserve currencies: the U.S. dollar, euro, the Japanese yen, and British pound. The IMF decided last year to include the RMB in its SDR basket as the fifth currency, effective October 1, 2016.

"We can start now to gradually broaden the use of the SDR, including using it as a reporting currency in parallel with the USD and exploring issuance of SDR-denominated assets," Zhou said, adding that China has released foreign exchange reserve data denominated in the SDR in addition to the U.S. dollar starting from this month.

Zhou said China will also explore issuing SDR-denominated bonds in the domestic market and look forward to the IMF's further analysis on strengthening the role of SDR this year.

"We support the examination of the possible broader use of the SDR," the IMFC said Saturday in a communique after the meeting of the 24-member committee.

"The IMF will discuss the case for a general allocation of SDRs and the reporting of official reserves in SDR," the communique said.