Saturday, 4 July 2009

US dollar holdings are "a problem for us" says Indian official

The ongoing campaigning within the BRIC economies for a serious rethinking of the need to replace the US Dollar as the global reserve currency appears now be to be gaining momentum as the Indian government are now taking the matter seriously at the highest levels with one senior adviser to the Indian PM saying that -- "The major part of Indian reserves is in dollars -- that is something that’s a problem for us"

In the following piece it is reported by Blomberg that India is now joining for calls at the upcoming G8 and G20 meetings for the first steps in establishing an auxiliary unit of account which will ease the dependency of major creditor nations on the currency of the largest debtor nation.
Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he is urging the government to diversify its $264.6 billion foreign-exchange reserves and hold fewer dollars.

Singh is preparing to join leaders from the Group of Eight industrialized nations -- the U.S., Japan, Germany, Britain, France, Italy, Canada and Russia -- at a summit in Italy next week which is due to tackle the global economy. China and Brazil will also send representative to the summit.

As the talks have neared, China and Russia have stepped up calls for a rethink of how global currency reserves are composed and managed, underlining a power shift to emerging markets from the developed nations that spawned the financial crisis.

Also from the July 4 Bloomberg news story, it is becoming increasingly apparent that the Chinese government are not going to let this issue get kicked into the long grass, no matter how awkward it will become for President Obama and his cronies in the major Wall street firms - nor for that matter Mr Brown who is keen to protect the dominance of London in traditional forex trading

No comments:

Post a Comment