China must communicate more clearly on FX policy: IMF's Lagarde

China needs to ensure clear communication about key policies, including about foreign exchange, in light of its growing weight in the world economy, International Monetary Fund chief Christine Lagarde said Friday.

China has taken flack from some of its international partners for not communicating more clearly to financial markets, which has helped fuel bouts of volatility last year and at the start of this year.

"As China now plays a considerable role and is an important actor in global growth, it absolutely must communicate precisely with everyone including in the market, especially as regards its foreign exchange policy," Lagarde told a news conference.

Speaking at a seminar on the international financial architecture at the French finance ministry, Lagarde said that risks from swings in international capital flows were on the rise, which raised the importance of improving financial safety nets in place to help countries in need. Chinese central bank governor Zhou Xiaochuan suggested that broader use of the IMF's special drawing rights might be an answer, starting with reporting central bank reserves in them and possibly issuing some bonds denominated in them.

"The SDR could be a stabilising force in the international financial system and its broader use might not be that difficult," the governor said.