No substitute for US dollar: Manmohan Singh

Washington, Nov 23 ( Describing the downturn in the US economy as a “temporary setback,” Prime Minister Manmohan Singh has said there was no substitute to the US dollar for replacement as the global reserve currency.

“As far as I can see there is no substitute for the dollar,” the economist-prime minister told CNN in an interview telecast as he landed in Washington to begin a four-day state visit to the United States.

Way back in the 1960s too, a leading economist had said that the days of The dollar as a reserve currency were over, but things changed and the US recovered thanks to the remarkable spirit of its people, he recalled.

“I have no doubt that these things are not permanent. Nor do they represent an irreversible shift in the economic strength of the United States,” he said expressing confidence that the US would bounce back.

“The power to create money is an index of its strength,” Manmohan Singh said, noting that the Chinese who have 2.5 trillion dollars in reserve assets “have not disposed even a fraction of them,” Singh added.

China allowed the yuan to rise 21 percent against the dollar between July 2005 and July 2008 before effectively repegging the yuan to help its exporters cope with a slump in global demand.