Experts cool to Zhou proposal

The central bank governor's idea of replacing the US dollar with a super-sovereign reserve currency may take decades to realize, even if it is possible, economists said.

Zhou Xiaochuan, governor of the People's Bank of China, said in an article that it was necessary to create a reserve currency "that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies".

Zhou suggested that the Special Drawing Rights (SDRs) could be used as a super-sovereign reserve currency. His comments echoed Russia's latest proposal for the creation of a new reserve currency issued by international financial institutions.