What have you always wondered about the economy? Tell us
Fallout: The Financial Crisis

U.N. wants to move away from dollar

Janet Babin Mar 20, 2009
HTML EMBED:
COPY
Fallout: The Financial Crisis

U.N. wants to move away from dollar

Janet Babin Mar 20, 2009
HTML EMBED:
COPY

TEXT OF STORY

Steve Chiotakis: The U.S. dollar is taking a beating. Not that it’s been Mr. Popular lately anyway, but ever since the Federal Reserve this week announced its intent to pump more money into the American economy, commodity prices have gone up and the dollar’s value down. Now, a U.N. panel may recommend the dollar be ditched as the world’s top reserve currency. From North Carolina Public Radio, here’s Marketplace’s Janet Babin.


Janet Babin: The Fed’s decision to pump a trillion more dollars into the U.S. economy has other nations worried about whether the dollars they hold will drop in value.

Typically, the world’s central banks have about two-thirds of their cash reserves in dollars. A U.N. panel next week will recommend that the banks consider diversifying.

But currency expert Marc Chandler at Brown Brothers Harriman says the U.N. has no real power over the world’s central banks and what kind of cash they decide to hang onto:

Marc Chandler: Countries choose that themselves. I would say that there is no evidence whatsoever that central banks as a whole have removed one single dollar from reserves, despite people talking about this.

Chandler says countries like Russia are pulling for the U.N. to ditch the dollar because it would help them shore up their own currency. Even though the dollar may weaker a bit more, Chandler says there’s no clear alternative for the world’s banks to turn to.

I’m Janet Babin for Marketplace.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.