Dollar Again Under Attack as World's Reserve Currency
A United Nations panel has piled onto the dollar-haters, which include China and Russia, calling for a different kind of world reserve currency than the U.S. dollar.
The dollar is the world's reserve currency because the world does business in dollars. Despite the carping, China still wants dollars by the billions, as it continues to snap up U.S. debt.
Nevertheless, probably because they hate being dependent on the dollar, China and Russia have called for a different backup currency, such as the International Monetary Fund's special drawing rights, which are -- to quote the IMF: "neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members."
Few think such a thing is practical. Except, perhaps, for the U.N.'s conference on trade and development.
This report, which came out yesterday, comes as the dollar sits at a year-long low against the euro.
-- Frank Ahrens
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September 8, 2009; 2:10 PM ET
Categories: The Ticker | Tags: dollar, euro, reserve currency
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