Posts Tagged ‘deficits’

Dollar Supremacy to End? New Global Reserve Currency to Set In ?

UN called on Tuesday for a new global reserve currency to end dollar supremacy. Is dollar Supremacy at risk?

UN called for a new global reserve currency to end dollar supremacy. Is dollar Supremacy at risk?

The United Nations has called on for a new global reserve currency to end dollar supremacy, which has allowed the United States the “privilege’’ of building a huge trade deficit.

“Important progress in managing imbalances can be made by reducing the reserve currency country’s ‘privilege’ to run external deficits in order to provide international liquidity,’’ UN undersecretary-general for economic and social affairs, Sha Zukang, said.

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Speaking at the annual meetings of the International Monetary Fund and World Bank in Istanbul, he explained:

“It is timely to emphasis that such a system also creates a more equitable method of sharing the seigniorage derived from providing global liquidity.’’

Greater use of a truly global reserve currency, such as the IMF’s special drawing rights (SDRs), enables the seigniorage gained to be deployed for development purposes,’’ he said.

The SDRs are the asset used in IMF transactions and are based on a basket of four currencies—the dollar, euro, yen and pound—which is calculated daily.

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China had called in March for a new dominant world reserve currency instead of the dollar, in a system within the framework of the Washington based IMF.

Beside this another worrying news for Dollar lovers is floating around that Arab states had launched secret moves with China, Russia, Japan and France to stop using the dollar for oil trades, though denied by many of arab states.

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Rising Sugar Prices Threatens to Make Coming Festival Season Bitter :(

Skyrocket prices of Sugar

Rising sugar prices are threatening to make the coming festival season bitter and are causing concerns for many consumers.

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Moreover, in order to meet increasing demand, India will be forced to import sugar in large quantities and this in all possibility will further increase sugar prices.

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However, local production has plunged to 14.5 million tonnes in the 2008-09 with demand at 23 million tonnes, the deadline for duty-free raw sugar imports has been extended by nine months to December 2010.

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Additionally, the government is going to start a fortnightly sale of non-levy sugar with the September quota set at 2.11 lakh tonnes 🙂

This year most deficits have been met by opening stocks and next year they’ll need much larger imports of about 6 million tonnes of raw sugar and 1 million tonnes of white sugar.

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Moreover, nearly 4 million tonnes of sugar have been already purchased by the Indian industry, while India’s sugar shopping spree abroad has sent prices of refined sugar in the global market skyrocketing.

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Additionally, it is said that the world market has recorded a 28-year high and has shot up 60% to $610 per tonne in August 2009 from a level of $380 per tonne in October 2008.

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