Reserve currency structure not to change in next 10 years

The structure of reserve currencies in the world will not change in the next 10 years, Russian Vice Prime Minister and Finance Minister Alexei Kudrin told Russian journalists on Wednesday. He is taking part here in the Conference on the World Financial and Economic Crisis and its Impact on Development held within the framework of the UN General Assembly, Itar-Tass reported.

“In the next 10 years we cannot speak about the considerable changes in the structure of reserve currencies in the world,” the RF vice prime minister said. “Later this will depend on the efforts of countries aimed at the creation of currency unions, and at the liberalisation of their economies, as in the case with China,” he added. “If China takes this path and creates a convertible currency from yuan, then not earlier than in 10 years, but most likely later we will be able to speak about the creation of a new reserve currency that will be gaining its position gradually,” Kudrin noted.

He also believes that the “Chinese currency could become a replacement” for the present world reserve currencies.

“Maybe China will be creating a currency union – we don’t know this,” the RF vice prime minister continued. Kudrin also expressed the view that this may happen “abroad within a decade.” “Within the decade we will be able to forecast stability of the use of the American currency, but further it will depend on the steps and actions taken by countries, including the international community aimed at the development of measures for a stable world currency system,” he noted.

Now the US dollar is the main reserve currency in the world, the euro is second and then follow other currencies, the minister said. “It is not so easy to change this structure,” Kudrin stressed. “All settlements in the world are made either in dollars or euro. Even settlements between countries that do not trade with each other in dollars,” the official stated. In his view, this is the evidence that the US dollar is “a currency convenient for use.” “Of course, much depends on the stability of the American economy, its overcoming the crisis and the possibilities it will get out of the crisis with,” Kudrin said.