S&P downgrade and...
There are intense efforts to whittle down the influence of the United States dollar as the key international reserve currency.
The latest move is coming from the BRICS nations, which are made up of Brazil, Russia, India, and China. and South Africa.
In a statement released at a summit on the Southern Island of Hainan, China, the leaders of the BRICS countries said the recent financial crisis had exposed the inadequacies and deficiencies of the current monetary order, which had the dollar as its linchpin.
They are also worried about the long-term fate of the dollar because of America's large trade and budget deficits. They also begrudge the privileges that come with being the leading reserve currency, hence the call for a revamped system that is more stable.
To push home their agenda, the development banks of the five BRICS nations agreed in principle to establish mutual credit lines denominated in their local currencies, not the U.S. currency.
The leaders welcomed discussions about the global role of the Special Drawing Right (SDR), the International Monetary Fund's in-house accounting unit and reserve asset, which some experts believe can grow into a partial substitute for the dollar.
The SDR now comprises the dollar, the euro, the Japanese yen and the British pound.
But leaders stepped around the issue of whether China's yuan should join the SDR, saying only that they welcomed discussion of the composition of the SDR's basket of currencies.
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