European Economic News
Greater Intl Stability Requires Overhaul Of Monetary, Financial System: UNCTAD
9/8/2009 7:36 AM ET
The role of the U.S. dollar as the main reserve currency should be given to a new global currency, overseen by a new global bank, the Geneva-based UN Conference on Trade and Development said on Monday.
According to the UN body, the dollar has significantly lost its value and a country like the United States that has current account deficit is under no obligation to adjust to growing unbalance in the current account.
"The current international monetary system, with flexible exchange rates between the major currencies, the dollar as the main international reserve currency, and free international capital flows, has failed to achieve the smooth adjustment of payments imbalances," the UNCTAD said in its Trade and Development Report 2009.
The report said no country is obliged to hold reserves in dollars; indeed, central banks have been increasingly diversifying their reserve holdings in other currencies, in particular the euro, in order to reduce the exchange-rate risk in a world of financial and currency instability.
Nevertheless, since the dollar serves as the main currency for settling international transactions, it has continued to be the preferred choice.
Greater Intl Stability Requires Overhaul Of Monetary, Financial System: UNCTAD
9/8/2009 7:36 AM ET
The role of the U.S. dollar as the main reserve currency should be given to a new global currency, overseen by a new global bank, the Geneva-based UN Conference on Trade and Development said on Monday.
According to the UN body, the dollar has significantly lost its value and a country like the United States that has current account deficit is under no obligation to adjust to growing unbalance in the current account.
"The current international monetary system, with flexible exchange rates between the major currencies, the dollar as the main international reserve currency, and free international capital flows, has failed to achieve the smooth adjustment of payments imbalances," the UNCTAD said in its Trade and Development Report 2009.
The report said no country is obliged to hold reserves in dollars; indeed, central banks have been increasingly diversifying their reserve holdings in other currencies, in particular the euro, in order to reduce the exchange-rate risk in a world of financial and currency instability.
Nevertheless, since the dollar serves as the main currency for settling international transactions, it has continued to be the preferred choice.
John HP
HollowPoint Trader
Manual Trading At It's Best