New Delhi, July 13: Reserve Bank of India governor D Subbarao said the dollar will continue to be the global reserve currency for now, amid calls for debates to replace the US unit.
“At this time I’m not sure if there is a currency that can replace the dollar,” Subbarao said in the interview with Central Banking Publications, London.
“In any case, replacing the dollar can’t happen by fiat. It has to happen on the strength of that alternate currency,” he said. Subbarao said he had studied the debate for the global currency, the alternatives for it and implications for the global and emerging economies. Countries such as China called for a debate at the G8 summit on proposals for a new global reserve currency to replace the dollar.
The weight of the dollar in the basket of currencies that helps set the rate of India’s partially convertible rupee currency may be reduced, Suresh Tendulkar, chairman of the prime minister’s economic advisory council, had said recently. “The basket may undergo change.
That’s up to the Reserve Bank of India. They have to make a call which is the stability of the foreign exchange,” he had said. Subbarao said the debate would likely carry on longer than anticipated before countries reach an agreed view on a “minimum acceptable programme”.
-Agencies