Wednesday 12 May 2010
IMF: Lessen dependence on dollar
The IMF has urged the planet’s governments to reduce their dependence on the dollar -which weakens the international monetary system already strained by the crisis - by placing other currencies, like the euro or the yen, in their foreign exchange reserves.
“A number of measures can be taken to strengthen international monetary systems,” in particular better surveillance of capital flows, stronger financial safety nets and greater use of special drawing rights, said Dominique Strauss-Kahn, head of the International Monetary Fund, after a central bankers’ conference in Zurich, on 11 May.
The IMF has urged the planet’s governments to reduce their dependence on the dollar -which weakens the international monetary system already strained by the crisis - by placing other currencies, like the euro or the yen, in their foreign exchange reserves.
“A number of measures can be taken to strengthen international monetary systems,” in particular better surveillance of capital flows, stronger financial safety nets and greater use of special drawing rights, said Dominique Strauss-Kahn, head of the International Monetary Fund, after a central bankers’ conference in Zurich, on 11 May.
These measures include “wider use of alternative reserve assets, for example in the euro, yen or yuan,” which could act as “a safety valve,” explained Strauss-Kahn.
Another option to lessen dependence on the dollar would be greater use of special drawing rights (SDR), considered more stable. Special drawing rights are an international reserve instrument created by the IMF in 1969 to complement members’ existing official reserves.
The conference was dominated by the Greek crisis and the euro’s difficulties. “I have no doubt that the programme put in place to help Greece will enable the country to solve its problems,” insisted Strauss-Kahn.
Another option to lessen dependence on the dollar would be greater use of special drawing rights (SDR), considered more stable. Special drawing rights are an international reserve instrument created by the IMF in 1969 to complement members’ existing official reserves.
The conference was dominated by the Greek crisis and the euro’s difficulties. “I have no doubt that the programme put in place to help Greece will enable the country to solve its problems,” insisted Strauss-Kahn.
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