Dollar as world’s only reserve currency is illegal, Kazakhstan president says

A new world currency must be created under the aegis of the United Nations Organization, Kazakhstan’s President Nursultan Nazarbayev stated during his speech at the 21^st Congress of the Eurasian Association of Universities in Astana.

Photo: Dollar as world’s only reserve currency is illegal, Kazakhstan president says

“We need to switch to an absolutely new global currency system based on a legitimate and, from the point of view of all countries, joint monetary unit. All countries must participate in its issuance and regulation,” Interfax quoted Nazarbayev as saying.

The Kazakh president believes that the present financial system in the world does not meet the requirements of today and does not correspond to the currency system stability criteria – “the system that we all rely on, under which we all live in international trade,” as Nazarbayev put it.

“World currency is de jure not legal because it was never accepted by any communities, any organizations and there is no such law in the world,” the president of Kazakhstan said.

“The procedure of the activity of the world currency issuer is not democratic. The mechanism of the balance of demand and supplies of the world currency is uncompetitive and constrained,” Nazarbayev said. “The world currency market is not related to civilized markets, whereas the system to issue the world currency is not controllable,” he continued.

Nazarbayev stated that many countries offered their models to reform the currency and financial system in connection with the world crisis. He particularly reminded the idea of German Chancellor Angela Merkel to set up an economic board at the UN to work on the issue.

The leaders of Russia and Kazakhstan have made a number of statements since the beginning of the new year setting out their support to various financial projects. Nazarbayev expressed his idea of a new joint world currency created under the UN’s aegis during his recent visit to India. “I think that we need to have the fair world currency, but not with one issuer only, as it happens now,” he stated.

Russia ’s Prime Minister Putin said during the recent World Economic Forum in Davos that the world needs to proceed to the model of several reserve currencies. However, Both Putin and Nazarbayev stressed out the need to defend economies against the dollar. Putin said that the world’s overdependence on the dollar as the world’s only reserve currency, was dangerous for the global economy.

An official spokesman for the press service of the International Monetary Fund told Itar-Tass that the issue, which Nursultan Nazarbayev touched upon, was very interesting, although it had not been studied thoroughly yet.