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UN economic summit to discuss currency reserves
April 14, 2009 / 7:36 PM / 9 years ago

UN economic summit to discuss currency reserves

* Summit likely to question dollar as top reserve currency

* UN leader says many countries have lost trust in dollar

By Louis Charbonneau

UNITED NATIONS, April 14 (Reuters) - A United Nations summit meeting in June will most likely discuss whether the world should abandon the U.S. dollar as the top reserve currency, a senior U.N. official said on Tuesday.

The president of the U.N. General Assembly, left-wing former Nicaraguan Foreign Minister Miguel D‘Escoto Brockmann, has invited the leaders of the 192 U.N. member states to attend a conference on the global financial crisis from June 1-3.

“There is the whole problem of the creation of special drawing rights (SDRs) and perhaps doing away with the dollar as the currency for international reserves,” D‘Escoto told reporters.

“I am sure that that will be one of the things that heads of state will want to discuss (at the summit),” he said, adding that many countries had lost their trust in the dollar.

China and Russia have called for a sweeping overhaul of the global monetary system that would enhance the use of the SDR, an international reserve asset created by the International Monetary Fund in 1969 that has the potential to act as a global reserve currency.

The proposals by the emerging economic powers reflect concern with the primacy of the dollar as the main reserve currency.

The IMF has said the dollar’s status as the dominant reserve unit is not under threat. Russia has said that introducing an international reserve currency to dislodge the dollar could curb the volatility of foreign exchange markets.

D‘Escoto said he was sending out letters on Tuesday to the leaders of all 192 U.N. member states urging them to attend the summit. He said he was sending a special personal letter to U.S. President Barack Obama asking him to come to the summit.

It was not immediately clear how many leaders would attend. The summit has strong backing from the so-called Group of 77 developing states, including China, D‘Escoto said.

U.N. officials say the summit is also a response to the recent summit of the G20 club of big developed and developing economies in London. (Editing by Eric Beech)

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