India has joined Russia and China in publicly stating that the world economy relies too much on the U.S. dollar.
Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, recently urged his country to diversify its foreign holdings away from the dollar, Bloomberg reported.
Continuing challenges to the dollar, which has been a linchpin of world finance and trade since 1945, emphasize the shift in relative economic power toward emerging markets and away from the developed nations that spawned the global crisis.
For all the concerns about the dollar’s role, emerging markets such as China and India remain dependent on the currency. According to figures from the International Monetary Fund, the share of dollars in allocated global foreign-exchange reserves increased to 65 percent, or $2.6 trillion, in the first three months of this year, the highest since 2007.
Not everyone is dollar skeptical, however.
German Finance Minister Peer Steinbrück countered recent dollar concerns by saying he thinks it would keep its role as the world's reserve currency even as rival currencies gained in clout.
"I don't think it's very probable that the U.S. dollar will lose its role as the leading reserve currency worldwide," Steinbrück told the Wall Street Journal.
He added, though, that "some states are very much in favor of using International Monetary Fund Special Drawing Rights" as an alternative.
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