US rejects China’s call for a global currency

March 25th, 2009 - 4:14 am ICT by IANS  

Washington, March 25 (DPA) US officials Tuesday rejected calls from China and Russia for the international community to shift towards a global reserve currency that could replace the dollar.
At a congressional hearing in Washington, Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke said they opposed the idea that was floated by the head of China’s central bank earlier Tuesday.

Zhou Xiaochuan, the governor of the People’s Bank of China, suggested a “gradual process” of reform away from the dollar and towards an international currency reserve under the International Monetary Fund.

China’s government has expressed concerns in the last month over its nearly $1-trillion holdings of US government debt amid the worst global recession since World War II, forcing the White House to insist that China’s reserves are still in good hands.

Russia last week said it would propose the idea of a global reserve currency, which might be more stable in times of economic crises, at the Group of 20 nations summit of the world’s leading economies next month.

Geithner and Bernanke were asked to reject the proposal during a brief exchange at a committee hearing in the House of Representatives.

“I’m wondering would you categorically renounce the United States moving away from the dollar and going to a global currency as suggested this morning by China and also by Russia?” asked US congresswoman Michele Bachman, a Republican.

“I would, yes,” responded Geithner.

“I would also,” added Bernanke.

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