Tuesday, June 29, 2010

U.N. Report: Scrap Dollar as Sole Reserve Currency

U.N. Report: Scrap Dollar as Sole Reserve Currency
Submitted by SteveMT on Tue, 06/29/2010 - 18:09
in Current Events
[Tick-tock, tick-tock. The dollar is reaching the end of the trail.]

Scrap dollar as sole reserve currency: U.N. report
Louis Charbonneau
Tue Jun 29, 2010 4:56pm EDT

(Reuters) - A new United Nations report released on Tuesday calls for abandoning the U.S. dollar as the main global reserve currency, saying it has been unable to safeguard value.

But several European officials attending a high-level meeting of the U.N. Economic and Social Council countered by saying that the market, not politicians, would determine what currencies countries would keep on hand for reserves.

"The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency," the U.N. World Economic and Social Survey 2010 said.

The report says that developing countries have been hit by the U.S. dollar's loss of value in recent years.

"Motivated in part by needs for self-insurance against volatility in commodity markets and capital flows, many developing countries accumulated vast amounts of such (U.S. dollar) reserves during the 2000s," it said.

The report supports replacing the dollar with the International Monetary Fund's special drawing rights (SDRs), an international reserve asset that is used as a unit of payment on IMF loans and is made up of a basket of currencies.

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