Commercialize the SDR
Zhou Xiaochuan, the governor of the People’s Bank of China, made a splash prior to the recent G-20 summit by arguing that the IMF’s Special Drawing Rights should replace the dollar as the world’s reserve currency. But, for the SDR to become a true international currency, the IMF would have to become more like a global central bank and international lender of last resort.
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BERKELEY – Zhou Xiaochuan, the governor of the People’s Bank of China, made a splash prior to the recent G-20 summit by arguing that the International Monetary Fund’s Special Drawing Rights should replace the dollar as the world’s reserve currency. His reflections elicited nothing if not mixed reactions.