Russia to call for new reserve currency at G20

Tuesday, 31 March 2009, 02:13 Hrs
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Moscow: Russia will insist at the upcoming G20 summit in London that discussions are initiated into the possibility of creating a new world reserve currency, a Kremlin economic adviser said Monday.

"There are nuances in relation to the priorities of particular topics. For example, Russia is proposing to initiate discussions on reserve currencies while not all are ready for that. We'll insist that these discussions are necessary in subsequent months at all levels - academic, political and professional," Arkady Dvorkovich said.

Russia earlier put forward a suggestion to the G20 summit which would see the International Monetary Fund (IMF) examining possibilities for creating a supra-national reserve currency, and also prompting national banks and international financial institutions to diversify their foreign currency reserves.

"We believe it is necessary to consider the IMF's role in this process and also define the possibility and the need to adopt measures allowing for Special Drawing Rights (SDRs) to become an internationally recognized super-reserve currency," Russia's proposals read.

Dvorkovich said that these discussions should result either in a draft proposal or the conclusion that the current financial and payment system "is adequate and sufficient".

Dvorkovich earlier said there was an understanding that the international community thought the current system was inadequate and included too many risks related to the unilateral actions of those countries issuing reserve currencies.

Dvorkovich said it was necessary to think about a desirable shift in the development of the global currency system either towards a larger number of reserve currencies, including at regional level, or as a global reserve currency, the SD

At the same time, Dvorkovich said that it could include a combination of both.

Russia's proposal to the summit for the IMF to consider creating a supra-national reserve currency was earlier supported by China, but dismissed by US President Barack Obama as unnecessary.

The G20 summit, involving advanced and emerging economies and international financial institutions, will be held in London April 2, and will focus on the international community's efforts to overcome the ongoing global financial crisis.
Source: IANS
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