Tags: un | global | currency | dollar

U.N. Wants Global Currency to Replace Dollar

Wednesday, 09 Sep 2009 09:54 AM

By Dan Weil

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Add the United Nations to a list that includes China and Russia in calling for an alternative to the dollar as the world’s sole reserve currency.

A United Nations panel has recommended a multilateral currency regime instead.

A report from the U.N. conference on Trade and Development also called for managed currency rates as opposed to free floating ones.

"A viable solution to the exchange-rate problem would be a system of managed flexible exchange rates targeting a rate that is consistent with a sustainable current-account position,” the report said, according to The Wall Street Journal.

“But since the exchange rate is a variable that involves more than one currency, there is a much better chance of achieving a stable pattern of exchange rates in a multilaterally agreed framework for exchange-rate management."

The U.N. report points out that the dollar’s current role absolves the U.S. of having to make necessary policy adjustments.

“Thus, the dominance of the dollar as the main means of international payments also played an important role in the build-up of the global imbalances in the run-up to the financial crisis."

Nobel laureate economist Joseph Stiglitz argues that the dollar is indeed in trouble.

“Higher deficits spark market concerns over future inflation; concerns of inflation contribute to a weaker dollar; and both come together to undermine the greenback’s role as a reliable store of value around the world,” he wrote in The Atlanta Journal Constitution.

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