John Lipsky, the first deputy managing director of the IMF, said on Friday at the St Petersburg Economic Forum that there were "many, many attractions in the long run" to SDRs replacing the dollar as the global reserve currency. He said however, that it was not a quick, short or easy decision. He said that it would be "quite revolutionary."
He said that SDRs would have to be de-pegged from other currencies and issued by an international organisation with similar authority to a central bank in order to become liquid enough to be used as a reserve currency. The value of SDRs is based on a basket of key international currencies: the dollar, the euro, the yen and sterling. The basket is reviewed every five years.
Lipsky is the first senior IMF official to publicly back People's Bank of China governor Zhou Xiaochuan's argument that the SDR should replace the dollar as a global reserve currency to promote the stability of the global monetary regime.
At the same forum, Dmitry Medvedev, the president of the Russian Federation, said that having a number of regional reserve currencies could stabilise the world financial system.