Letters: Reserve currencies

This refers to the editorial "Papering over the cracks" (October 18). The fiscal discord within the US, its $17-trillion external debt is little different from the fiscal travails of other world economies in stasis, except that the dollar is the world reserve currency. If quantitative easing was the invading phase of the monetary tsunami epicentred in the US, a default would have been its receding phase that would have been catastrophic. Worldwide, there are trillions in overnight repos between banks that use US Treasuries as collateral for interbank loans and if these instruments become "suspect", then financial markets would collapse. The sad part is that the US lawmakers from both sides of the aisle intend to carry their squabble forward to another day. The dollar itself appears fragile. Perhaps it is time the global exchange gets a basket of mature currencies to replace a wayward nation's dollar.

R Narayanan Ghaziabad

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