With the current financial crisis which originated in the U.S. and quickly engulfed the entire world, experts have now started seriously thinking about restructuring the global financial architecture. In a recent report from PTI, it appears that the recently held G-20 ministerial meet, this proposal has been mooted by the IMF to the participants which also included the Indian Finance Minister and Dy. Governor of the Reserve Bank of India. Perhaps it is time to seriously consider replacing the US Dollar as the reserve currency, and the Euro has now emerged as a strong contender.
“There have been numerous calls in recent months for a new Bretton Woods agreement which I strongly endorse,” IMF chief Dominique Strauss-Kahn wrote to heads of G20 countries including Indian prime minister Manmohan Singh.
Dr Singh had said last week “we will seek reform of the international financial institutions and improve regulation and supervision to prevent recurrence of such crisis.”
IMF, which has recently come out with a gloomy forecast of world economic growth, is likely to present a fresh report on the global scenario at the summit on November 15.
The fund in its latest update has said the world economic growth rate would slip from 5% in 2007 to 3.7% in 2008 and further dip to 2.2% next year.
Similarly, the global trade growth rate, which has implications for the emerging economies like India and China, will nosedive from a high of 9.4% in 2006 to 4.6% in the current year and 2.1% in 2009.
Contributed By:
Prof. Bikramjit Sen
(GLobsyn Business School)
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