People's Bank of China governor Zhou Xiaochuan recently sparked a new round of debate regarding the international monetary regime with his call for a new international reserve currency. While the dollar was not specifically mentioned, it is clear that the proposed new international currency is meant to replace the role that the US currency currently plays. When a senior official of a government that holds about 10% of the US government's marketable debt makes such a statement, people take notice. There also appears to be some international support for governor Zhou's idea, although the US is understandably less enthusiastic. So will we see the US dollar lose its international pre-eminence anytime soon
Why the dollar...
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