Russians favor gold backing for IMF SDRs

A Reuters report indicates a strong preference by the Russians for something tangible in the IMF's Special Drawing Rights, a "world currency" of sorts that a growing number of countries seem to favor over the present global reserve currency - the U.S. dollar.

The International Monetary Fund (IMF) should expand the basket of Special Drawing Rights to include the Chinese yuan, commodity currencies and gold, a senior Kremlin official said on Tuesday.
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"The rouble, yuan deserve to be included in the SDR basket," Kremlin economy aide Arkady Dvorkovich told a news conference ahead of the first summit of Brazil, Russia, India and China, known as BRIC, in the Russian city of Yekaterinburg.

"It is important that the composition of the basket also reflects the role of commodities in the global economy," Dvorkovich said, naming Australian and Canadian dollars as possible candidates.

"We also think that gold has a potential as a possible participant. The price of gold has a negative correlation to the dollar. Therefore it is beneficial to tie these two instruments into one so that investors feel safer," he said.

A lot of people are feeling "safer" these days when they have some gold...

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