Head of IMF Proposes New Reserve Currency

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Dominique Strauss-Kahn, the head of the International Monetary Fund, says the organization might eventually need to provide a new reserve currency that would be an alternative to the dollar.

"That day has not yet come, but I think it is intellectually healthy to explore these kinds of ideas now," he said in a speech on the future mandate of the 186-nation Washington-based lending organization.

The IMF is currently exploring ideas for such a currency. They said it would limit the extent in which the global ecomony relies on a single dominant country, such as the U.S.

"The challenge ahead is to find ways to limit the tension arising from the high demand for precautionary reserves on the one hand and the narrow supply of reserves on the other," Strauss-Kahn said.

Several countries including Russia and China have called for an alternative to the dollar, and suggested using the IMF for that purpose.

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