UN calls for dollar to be replaced as main global reserve currency

The US dollar should be scrapped as the main global reserve currency, a new report from the United Nations has concluded.

Rather than having the 'volatile' dollar playing such a vital role in the global reserve currency exchange, a new system of special drawing rights (SDRs) from the International Monetary Fund should be introduced, the UN said.

This would work by making payments to recipient nations in the unit of IMF loans, made up of a basket of currencies.

The idea behind this is that it would be more suitable for long-term economic stability.

The report concluded that the a new reserve system "must not be based on a single currency or even multiple national currencies but instead, should permit the emission of international liquidity - such as SDRs - to create a more stable global financial system".

The publication of the report comes in the same week that the Chinese government set the international currency exchange rate of the yuan at its highest level in five years.

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Posted by Chris Barber