(Recasts; adds quotes by IMF's Lipsky)
By Lesley Wroughton
WASHINGTON, March 24 U.S.'s top economic
officials on Tuesday dismissed suggestions by emerging economic
powers that the world move away from using the dollar as the
world's main reserve currency.
Meanwhile, the IMF said the idea highlighted global
concerns about the stability of the global financial system
after both China and Russia earlier urged an overhaul of the
global monetary system.
In a congressional hearing on Capitol Hill, U.S. Rep.
Michele Bachmann, a Minnesota Republican, asked U.S. Treasury
Secretary Timothy Geithner: "Would you categorically renounce
the United States moving away from the dollar and going to a
global currency as suggested this morning by China and also by
Russia, Mr Secretary?"
Geithner replied, "I would, yes."
She posed the same question to Federal Reserve Chairman Ben
Bernanke, who said: "I would also."
Chinese central bank chief Zhou Xiaochuan on Monday urged a
wider use of Special Drawing Rights created by the
International Monetary Fund as a global reserve asset in 1965.
Zhou's comments followed remarks by Russia last week which
said it would put forward a proposal at a meeting of the Group
of 20 in London on April 2 for the creation of a new global
Russia said its proposal had broad support among other key
emerging market economies including Brazil, India, China, South
Korea and South Africa.
Australia's Prime Minister Kevin Rudd also knocked down the
idea, telling a Washington audience late on Monday that the
dollar's position as the reserve currency remains
IMF TAKES LONG VIEW
IMF First Deputy Managing Director John Lipsky said on
Tuesday that while the discussion about a new reserve currency
was not a new one, it underscored a general concern about the
strength of the world's economic and financial system.
"These kinds of discussions of alternative reserve
currencies have been around a long time, some very serious
people have proposed them, but I don't think any of them are
considered a near-term option," he told Reuters Financial
Television in an interview.
"It's a very complicated and big proposition but it is part
of a natural conversation about how the stability and
effectiveness of the current international system can be
strengthened," Lipsky said.
He earlier told a news conference the discussion of changes
in IMF lending instruments, the reserve currency idea should
not be dismissed outright.
"It's a serious proposal and I don't think even the
proponents think of it as a short-term issue but rather a
long-term issue that merits serious study and consideration,"
(For related analysis, see [ID:nLN388353])