The continuing search for an alternative (to the dollar) global currency

Bankers, economists, financiers and others have for some time been looking to find another kind of currency, besides the dollar, to help stabilize global markets and exchanges. The dollar has been the de facto currency used for most global transactions – but this makes the market vulnerable both to US political instability and to American imperial ambitions. Below is a report on the ongoing discussions:

The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world’s reserve currency. The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system. SDRs represent potential claims on the currencies of IMF members. They were created by the IMF in 1969 and can be converted into whatever currency a borrower requires at exchange rates based on a weighted basket of international currencies. The IMF typically lends countries funds denominated in SDRs. While they are not a tangible currency, some economists argue that SDRs could be used as a less volatile alternative to the U.S. dollar. The goal is to have a reserve asset for central banks that better reflects the global economy since the dollar is vulnerable to swings in the domestic economy and changes in U.S. policy. The Fund also suggested that certain assets, such as oil and gold, which are traded in U.S. dollars, could be priced using SDRs.

http://money.cnn.com/2011/02/10/markets/dollar/index.htm

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