U.S. Treasury Secretary Timothy Geithner on Wednesday said that the U.S. dollar is still the world's reserve currency and will remain so for a long time, though he also expressed openness to expanded use of an International Monetary Fund (IMF) currency basket. During a speech in New York, Geithner was asked about whether he foresaw a change in the dollar's global role, answering “No, I do not.” “The dollar remains the world's dominant reserve currency and I think that's likely to continue for a long period of time,” adding that “as a country, we will do what's necessary to make sure we're sustaining confidence in our financial markets and in this economy's long-term fundamentals.” Geithner also said he is “quite open” to a recent Chinese suggestion to move toward greater use of a IMF-created global currency basket comprising dollar, euros, sterling and yen. Zhou Xiaochuan, China's central bank governor, earlier this month said the world should consider the IMF's Special Drawing Rights basket as a super-sovereign reserve currency. Geithner said he hadn't read Zhou's proposal, but added, “as I understand it, it's a proposal designed to increase the use of the IMF's Special Drawing Rights. I am actually quite open to that suggestion.” He also said he had “tremendous respect” for Zhou. China's foreign exchange reserves are the largest in the world at nearly $2 trillion and China is the biggest holder of U.S. Treasury debt.
