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<\/picture><\/div>\n\u00a9\u00a0<\/span>Getty Images \/\u00a0<\/span>aluxum<\/span><\/h5>\n<\/div>\n<\/div>\n\nThe US dollar has too much power as a reserve currency and the world desperately needs an alternative, billionaire investor and CEO of Kotak Mahindra Bank, Uday Kotak, said on Friday.<\/p>\n
Speaking at the Economic Times Awards for Corporate Excellence 2023, the banker described the dollar as \u201cthe biggest financial terrorist in the world.<\/em>\u201d\u00a0As most global assets are held in dollars in so-called nostro accounts with US banks, they are entirely dependent on decisions made by American bankers and authorities, he explained.<\/p>\n\u201cSomebody in the US can say: You cannot withdraw [this money] from tomorrow morning \u2013 and you are stuck. That is the power of the reserve currency,<\/em>\u201d Kotak added.<\/p>\nThe world is therefore \u201cdesperately looking for an alternative reserve currency,<\/em>\u201d he continued, suggesting that India should seize the opportunity to make its own currency, the rupee, the reserve.<\/p>\n\u201cIt is our time for making a shot at it, which will take us probably 10 years,<\/em>\u201d he stated. In order to achieve this goal, India must earn the trust of other global players by building strong financial institutions and a strong framework \u201cthat is not dependent on the whims and fancies of anyone<\/em>.\u201d Kotak added that he does not see other strong contenders for the role.<\/p>\n\u201cI don\u2019t think Europe can [make their currency the reserve], because its states are disunited. I don\u2019t think the UK or Japan have the heft to be taking that position, though both the British pound and the yen are free currencies. China, I think, has a major issue of trust with many countries around the world<\/em>,\u201d he said.<\/p>\nIn a tweet on Saturday, Kotak tried to further clarify his comments on the US dollar, explaining that he was referring to the overabundance of power that a reserve currency holds. This status gives such currency an ability to control global transactions, leading to situations where other countries may become dependent on it.<\/p>\n
\u201cIn a recent discussion on [the] US dollar I inadvertently used [the] words \u2018financial terrorist\u2019 which I would like to correct. What I meant was that a reserve currency has disproportionate power, whether it is nostro account, 500 basis points rate increase, or emerging countries holding dollars for liquidity,<\/em>\u201d he wrote.<\/p>\n<\/div>\n
The US dollar has too much power as a reserve currency and the world desperately needs an alternative, billionaire investor and CEO of Kotak Mahindra Bank, Uday Kotak, said on Friday.<\/p>\n
Speaking at the Economic Times Awards for Corporate Excellence 2023, the banker described the dollar as \u201cthe biggest financial terrorist in the world.<\/em>\u201d\u00a0As most global assets are held in dollars in so-called nostro accounts with US banks, they are entirely dependent on decisions made by American bankers and authorities, he explained.<\/p>\n \u201cSomebody in the US can say: You cannot withdraw [this money] from tomorrow morning \u2013 and you are stuck. That is the power of the reserve currency,<\/em>\u201d Kotak added.<\/p>\n The world is therefore \u201cdesperately looking for an alternative reserve currency,<\/em>\u201d he continued, suggesting that India should seize the opportunity to make its own currency, the rupee, the reserve.<\/p>\n \u201cIt is our time for making a shot at it, which will take us probably 10 years,<\/em>\u201d he stated. In order to achieve this goal, India must earn the trust of other global players by building strong financial institutions and a strong framework \u201cthat is not dependent on the whims and fancies of anyone<\/em>.\u201d Kotak added that he does not see other strong contenders for the role.<\/p>\n \u201cI don\u2019t think Europe can [make their currency the reserve], because its states are disunited. I don\u2019t think the UK or Japan have the heft to be taking that position, though both the British pound and the yen are free currencies. China, I think, has a major issue of trust with many countries around the world<\/em>,\u201d he said.<\/p>\n In a tweet on Saturday, Kotak tried to further clarify his comments on the US dollar, explaining that he was referring to the overabundance of power that a reserve currency holds. This status gives such currency an ability to control global transactions, leading to situations where other countries may become dependent on it.<\/p>\n \u201cIn a recent discussion on [the] US dollar I inadvertently used [the] words \u2018financial terrorist\u2019 which I would like to correct. What I meant was that a reserve currency has disproportionate power, whether it is nostro account, 500 basis points rate increase, or emerging countries holding dollars for liquidity,<\/em>\u201d he wrote.<\/p>\n<\/div>\n