Future of the dollar debated

PANAMA. The financial global crisis has prompted countries such as China, Russia and Brazil to think about replacing the dollar for an international reserve currency.

If this proposal becomes a reality the Panamanian economy could be heading to a complete meltdown.

The Panama Economists College president, Raul Moreira said that “the days of the dollar as an international reserve currency are numbered.

“If the dollar strengthens all the exporters could be affected at the same time and our products would become more expensive. However other countries could reap benefits as their produce would be cheaper,” said the economist.

“On the other hand if the dollar weakens, the equation will change benefiting our exporters whose produce would be cheaper and the importers would be affected,” said Moreira.

The banker, Luis H. Moreno takes a totally different view. “The attacks against the dollar from China and Russia are political. I the world wishes to change its reserve currency to begin the commercialization of oil it will not use the dollar. There is no doubt that the dollar is facing a crisis, but the US economy is the biggest in the world and its government is taking the appropriate measures to strengthen it,” said Moreno.

Sources of the Economy and Finance Ministry MEF, who did not want to be named said that so far the government has not issued any orders about studying the possibility of changing currency.

“Although we are a world trade exchange center, 98 percent of all the transactions that take place in the country are made in dollars. So powerful is this influence that the currency exchange houses in Panama are practically empty,” said the MEF analyst.

The circulation of a new currency is not contemplated by the Martinelli Administration.

The MEF Contracts and Acquisition Unit chief, Jose Fernandez said that Panama does not depend on the US Federal Reserve to print currency and for the last few years the country has been working with a money house in Canada.