July 6, 2009

ECB president backs the U.S. dollar

European Central Bank President Jean-Claude Trichet said he was very clear in his support of the U.S. dollar as the primary central bank reserve currency.

In advance of a Group of Eight summit scheduled to begin in Italy Wednesday, finance ministers from China, Russia and elsewhere have questioned whether or not the dollar's is still up for the job of stabilizing international transactions.

French Finance Minister Christine Lagarde said leaders should discuss the balance of currencies and the role of currencies in a world that has changed because of the crisis and the growing role of emerging countries, the EUobserver reported Monday.

In a recent interview, Russian President Dmitry Medvedev said, The system based on the dollar and euro have shown that they are flawed.

Medvedev also acknowledged that a switch to a different reserve currencies can't be introduced by presidential decree or by order of the central bank.

It's about trusting countries' economies, he said.

Trichet said Sunday: I am very very clear. I have just one message. It is extremely important that the U.S. has been saying that a strong dollar is in the interests of the U.S.

I consider that extremely important and I welcome this declaration, he said.