Indian official hints at diversifying currency basket
06 Jul 2009
On the heels of Russia and China, India too has indicated its concern over the supremacy of the US dollar and may consider diversifying the currency basket to give less weight to the dollar.
''The major part of Indian reserves is in dollars - that is something that's a problem for us,'' prime minister Dr. Manmohan Singh's economic advisor Suresh Tendulkar said on the sidelines of an economic conference in France on Friday.
''The currency basket may undergo changes. It's up to the Reserve Bank of India to decide," he added.
India's prime minister will join the G-8 summit of industrialised nations to be held in L'Aquila in Italy next week as an invitee along with the representatives from China, Brazil, Mexico and South Africa. The G-8 nations comprise Canada, France, Germany, Italy, Japan, Russia, the UK and the US.
Russia and China were calling for new global currency reserves in the changed economic scenario underscoring the shifting of power to emerging markets from the developed economies.
China, the world's top holder of foreign currency reserves of around $2 trillion, fears that the US government's huge stimulus package and mountain of debt could trigger inflation thereby reducing the value of its reserves.