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RUSSIA TO PITCH GLOBAL CURRENCY


Perhaps in response to Kazakhstan's proposed new currency, Russia has come out with a new global currency idea to eventually replace the dollar. The idea is for the creation of a supranational reserve currency to be issued by international institutions as part of a reform for the global financial system.


Asia Economic Institute

 

Perhaps in response to Kazakhstan’s proposed new currency, Russia has come out with a new global currency idea to eventually replace the dollar. The idea is for the creation of a supranational reserve currency to be issued by international institutions as part of a reform for the global financial system.

Last Wednesday, Kazakh President Nursultan Nazarbayev proposed a common currency for the five former Soviet republics, Kazakhstan, Kyrgyzstan, Tajikistan, Belarus and Russia, also known loosely as the Eurasian Economic Community (EEC). The plan is to create a common non-cash currency, named the yevraz, to insulate themselves from the global economic crisis’s impacts.

The yevraz is a stepping stone for Kazakhstan’s plan to create a singular world currency within the next 10 to 20 years. Nazarbayev said the yevraz could be a step towards a common global reserve currency that would operate under the auspices of the United Nations.

Russia’s announcement for their own plan comes only a week after Kazakhstan’s, but details are still vague. Similar to Kazakhstan, Russia plans to unveil the plan at the upcoming G20 meeting.

“The International Monetary Fund should investigate the possible creation of a new reserve currency, widening the list of reserve currencies or using its already existing Special Drawing Rights, or SDRs, as a superreserve currency accepted by the whole of the international community,” the Kremlin said in a statement issued on its web site. 

The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing national banks and international financial institutions to diversify their foreign currency reserves. It said the global financial system should be restructured to prevent future crises and proposed holding an international conference after the G20 summit to adopt conventions on a new global financial structure.

The Group of 20 industrialized and developing countries will meet in London on April 2.


Source: www.AsiaEcon.org
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Source: www.asiaecon.org |


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