A United Nations committee says the dollar should be replaced as the main international currency.
A U.N. report says the dollar's value is not reliable. One of the drawbacks of making the dollar the global reserve currency, it says, is that the global economy becomes tied to U.S. monetary policy, which is "based only on the state of the United States economy."
Instead, senior U.N. economic officials recommend greater reliance on an alternative to the U.S. dollar known as special drawing rights, or SDRs.
"Obviously there's going to be resistance because in the whole post-war period we've had essentially a dollar-based system," said Jomo Kwame Sundaram, U.N. assistant secretary-general for economic developmen, and a prominent Malaysian economist and author. "But this kind of transition can be achieved through a gradual process of SDR emissions. And this would not be disruptive."
The committee recommended a new international system based on a basket of currencies.
Rob Vos, director of the U.N.'s economic analysis division, said basing global currency reserves on "truly international liquidity" would reduce pressure on the U.S. dollar "because in order for countries to accumulate reserves in the form of dollars, the United States has to run deficits."