Dollar faces challenge as reserve currency

A leading economist said in Seoul yesterday that the U.S. dollar's supremacy as the world's reserve currency is facing profound challenges as the balance of economic and financial power shifts East amid the current economic crisis. 

"There is a slow-burning fuse underneath the dollar," Gerard Lyons, chief economist at Standard Chartered Bank, said in the World Economic Forum.

Underscoring the strengthening role of Asia, Lyons said that the depth of the global downturn drove key emerging economies, such as China and Russia, to cite the possibility of a new global reserve currency.

The forum drew a group of leading figures from business, government and academic circles to discuss Asia's role in helping to overcome the current crisis and shaping a future paradigm for the global system.

"This is not just an economic crisis but also a social crisis," Rajat Nag, managing director-general of the Asian Development Bank in Manila, told participants of the convention, referring. to the worsened social conditions stemming from a rise in unemployment. "Asia has to start on a different paradigm," the executive stressed.

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By Yoo Soh-jung

See Koreaherald