The US is willing to explore China’s proposal to give a synthetic global currency a larger role in the international financial system, Tim Geithner, US Treasury secretary, said on Wednesday.
But Mr Geithner said any change would be evolutionary and that the synthetic currency, called the International Monetary Fund Special Drawing Rights (SDRs), would not replace the dollar.
He said there would be no ”global monetary union” and the future of the dollar in the world system would rest on the US government’s ability to overcome the financial crisis and then put its fiscal house in order.
The comments came after calls by Zhou Xiaochuan, China’s central bank governor, for a new global currency as an alternative to the dollar.
China’s idea of a new currency would in effect expand the use of the SDR, a currency devised by the IMF in 1969 that was initially pegged to the dollar but is now based on the value of four different currencies: the dollar, yen, euro and pound.
Read more »
Created by Asia 40 weeks 4 days ago – Made popular 40 weeks 4 days ago