IMF Says New Reserve Currency to Replace Dollar Is Possible

By Alexander Nicholson

June 6 (Bloomberg) — The Inteational Monetary Fund said it’s possible to take the “revolutionary” step of creating a new global reserve currency to replace the dollar over time.

The IMF’s so-called special drawing rights could be used as the basis for a new currency, First Deputy Managing Director John Lipsky told a panel discussing reserve currencies at the St. Petersburg Inteational Economic Forum today.

“There are many, many attractions in the long run to such an outcome,” Lipsky told a panel discussing reserve currencies at the St. Petersburg Inteational Economic Forum today. “But this is not a quick, short or easy decision,” he said, adding that it would be “quite revolutionary.”

The SDRs would have to be delinked from other currencies and issued by an inteational organization with equivalent authority to a central bank in order to become liquid enough to be used as a reserve, he said.