Kremlin to Push Global Currency at G-20

The Kremlin will pitch a new currency at an upcoming meeting of the G-20. The Kremlin published its priorities Monday for the meeting, calling for a supranational reserve currency to be issued by international institutions. This is part of a reform of the global financial system.

The International Monetary Fund should investigate the possible creation of a new reserve currency, widening the list of reserve currencies, or using its already existing Special Drawing Rights, or SDRs, as a superreserve currency accepted by the whole of the international community, the Kremlin said in a statement on its web site.

The IMF created SDRs in 1969 to supplement the existing official reserves of member countries.

Russian President Dmitry Medvedev and Prime Minister Vladimir Putin have repeatedly called for the ruble, rather than the dollar, to be used as the regional reserve currency, although the idea has received little support outside Russia. The Kremlin has repeatedly criticized the dollars status as the dominant global reserve currency, and has lowered its dollar holdings in the last few years.

Analysts said the Kremlins proposal will not elicit excitement at the meeting.

This is all in the realm of fantasy, said Sergei Perminov, chief strategist at Rye, Man and Gore. There was a situation that resembled what they are talking about. It was called the gold standard, and it ended very badly.

Alternatives to the dollar are still hard to find, he said.

Recently, there have been other calls for a common currency. Kazakhstan President Nursultan Nazarbayev proposed a global currency at an economic conference in Astana, Kazakhstan.