Is the world in search of a new global reserve currency?
With the demand for a new currency order getting shriller, particularly from the BRIC stable, the idea has also found favour with Nobel Prize-winning economist Joseph Stiglitz, who heads a UN expert panel analysing the global financial crisis and recommending reforms. The dollar’s role as a good store of value is “questionable” and the currency has a high degree of risk... “there is a need for a global reserve system,” Stiglitz has been quoted as saying.
Not many days back, the UN Conference on Trade and Development (Unctad), in a report, had called for the creation of a new global reserve currency. While calling the dollar-based system a “confidence game” of financial speculation, the UN called for a new global reserve bank to manage the new currency.
According to reports this week, India is contemplating to invest $10 billion for increasing the special drawing rights (SDR) quota with the International Monetary Fund. Earlier, India’s gold buy of 200 tonne from the IMF was another step in its diversification drive.
IMF’s quasi-currency, the SDR, an idea first mooted in 1969, is slowly but surely getting back in business. In a run-up
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