US Dollar Preferred As Main Reserve Currency

US Dollar Preferred As Main Reserve Currency

http://www.reuters.com/article/newsOne/idUSTRE55124S20090602

Both the United States and China believe that the US dollar will remain the main reserve currency for a long time to come, US Treasury Secretary Timothy Geithner has said. The comment comes after Chinese Central Bank Governor Zhou Xiaochuan floated the idea of replacing the dollar as the world’s main reserve currency with IMF’s unit of account under the Special Drawing Right or SDR. Wrapping up two days of talks with Chinese officials, Geithner said China was concerned about the US economy’s outlook and the progress on the reforms front. Several Chinese officials have expressed concern regarding the ballooning of the US budget deficit and its impact on inflation and China’s holding of US debt. The Federal Reserve is extremely capable of handling the situation and maintaining the inflation levels, Geithner says.