NEW YORK (Bloomberg) - Russia and China should include emerging-market currencies such as the Brazilian real in their reserves as a first step toward developing a global currency to replace the dollar, Ashmore Investment Management Ltd. said.

"Emerging markets make up at least a third of the world's economy yet their currencies are completely not represented in reserves," said Ousmene Mandeng, head of Ashmore's public sector investment advisory in London.

"If China and Russia alone go out and say they'll hold five percent of their reserves in 12 to 15 emerging-market currencies, it will be something the central banks of the world will not be able to ignore."

The two countries have suggested the creation of a global reserve currency to rival the dollar after problems in the US sub-prime mortgage sector ballooned into the global credit crisis and economic slump. The new currency could initially be based on the International Monetary Fund's Special Drawing Rights, which are valued against a basket of currencies including the dollar and the yen, China has said. Malaysia, Thailand and Indonesia have expressed support for the idea.

Diversifying reserves to include a bloc made up of currencies such as the real, Mexican peso, South African rand, China's yuan and Russia's ruble would be a "good start, as it could create a new dynamic in global currency markets", Mandeng said. Developing a single global currency will be difficult in the short-term because the US probably wouldn't support it and different countries will try to wrest control over it, he said.

Russia's foreign-currency reserves, the world's third largest, are made up of 45 percent dollars, 44 percent euros, 10 percent pounds and one percent yen, according to central bank chief Sergey Ignatiev. China doesn't publicise the composition of its holdings, the world's biggest, though it could be made up of as much as 80 percent dollars, Mandeng said.