The imperative of greater global currency stability means the world can no longer rely, as it has done since the end of the gold standard, on a currency issued by a single country, the head of the IMF said on Tuesday.
Dominique Strauss-Kahn, the managing director of the International Monetary Fund, restated his view that a new global currency might evolve out of the Special Drawing Right, the Fund’s in-house unit of account.
“That probably has to be a basket,” Strauss-Kahn said of the eventual replacement for the dollar. “In a globalised world there is no domestic solution,” he told a forum.
Speaking later at a news conference, Strauss-Kahn reiterated the message that has been a constant refrain during his visit — that China needs a stronger yuan as part of a package of policies to help rebalance its economy by promoting domestic demand.
China has kept the yuan, also known as the renminbi (RMB), pegged around 6.83 per dollar since July 2008, following a 21 percent rise over the previous three years, to help its exporters weather the global economic crisis.
NO TIME TO LOSE
Strauss-Kahn expressed concern that political willingness to overhaul the international monetary system will falter if, in a year’s time, the visible signs of the economic crisis have faded.
(Reporting by Alan Wheatley and Simon Rabinovitch)
Was this article valuable?
Here are more articles you may enjoy.