EU rejects China's calls for global currency- - by Joe McDonald
The European Union's top economy official said Tuesday that the U.S. dollar's role as the international reserve currency is secure despite Chinese calls for a global alternative. EU Commissioner Joaquin Almunia says he didn't see “major structural changes in the role the dollar plays today as a major reserve currency” following a call by China's central banker for a new global currency controlled by the International Monetary Fund.
Beijing has long been uneasy about relying on the U.S. dollar for the bulk of its trade and to store foreign reserves. Premier Wen Jiabao publicly appealed to Washington this month to avoid any steps in response to the crisis that might erode the value of the dollar and Beijing's estimated $1-trillion holdings in Treasuries and other U.S. government debt. “A super-sovereign reserve currency managed by a global institution could be used to both create and control global liquidity,” Mr. Zhou wrote. “This will significantly reduce the risks of a future crisis and enhance crisis management capability.” Mr. Zhou also called for changing how SDRs are valued. Currently, they are based on the value of four currencies — the dollar, euro, yen and British pound.
No comments:
Post a Comment