MANILA, Philippines - The US dollar can no longer be the world's sole reserve currency moving forward, economist Jeffrey Sachs said on Thursday.
"I don't see a way the dollar can be a stable sole reserve currency any longer. The United States is not in a position to play that role. The role of the US in the world economy is diminishing in relative terms. Problems of fiscal policy in US and the competitiveness challenges make it impossible for the US to be the single robust currency," he said, in a press conference at the Asian Development Bank meeting in Manila on Thursday morning.
In the aftermath of the financial crisis, there have been increasing dissatisfaction with the dollar as a reserve currency amid concerns about the US economy and its fiscal policies.
Sachs said the world should have multiple stable reserve currencies, instead of just one.
"Ideally, we would like to see 3 or 4 reserve currencies and a flexible arrangement among them, the dollar, euro, yuan and possibly other Asian currencies, the yen and so forth. The world would be helped by having multiple stable reserve currencies," he said.