Tuesday June 2, 08:16 PM
Russia says world needs more reserve currencies
MOSCOW, June 2 (Reuters) - The world needs a wider range of reserve currencies because the economic crisis in the United States has changed perceptions of the dollar, Russian President Dmitry Medvedev said in an interview published on Tuesday.
Russia, which holds the world's third largest foreign exchange reserves, says the crisis has shown the failings of the financial system set up by the 1944 Bretton Woods conference and wants global institutions to be reshaped.
'The world needs more reserve currencies,' Medvedev told U.S. television station CNBC, according to the text of the interview provided by the Kremlin (Frankfurt: 513350 - news) .
'The perception of the dollar has naturally changed because of the crisis in the American economy.'
'The current situation demands a bigger number of currencies which could be used for investing money and by banks, citizens and states,' the Kremlin chief said.
Moscow in recent years has reduced the dollar's role in its reserves, which totalled $399.9 billion on May 22, and repeatedly called for the use of the Russian rouble as a regional reserve currency.
'In the near future, our task is the creation of more reserve currencies,' Medvedev said.
He said that China, which has the world's biggest hoard of foreign currency reserves, supported Moscow's idea for making the International Monetary Fund's Special Drawing Rights (SDR) the basis of a new supranational currency.
Medvedev said Russian gross domestic product would contract by 'no less than 6 percent or perhaps even more,' in 2009 and called on the government to deal with difficult levels of unemployment.
When asked about the risk of global inflation soaring, he said: 'In this situation there is a threat of an acceleration of inflationary processes in the world and that could result... in problems for the banking system.'
(Reporting by Guy Faulconbridge, editing by Andy Bruce) Keywords: RUSSIA CURRENCY/MEDVEDEV
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