RBI: not time to replace dollar as reserve

MUMBAI (Reuters) - Reserve Bank of India (RBI) Governor Duvvuri Subbarao said the dollar will continue to be the global reserve currency for now, amid calls for debates to replace the U.S. unit.

"At this time I'm not sure if there is a currency that can replace the dollar," Subbarao said in the interview with Central Banking Publications, London.

"In any case, replacing the dollar can't happen by fiat. It has to happen on the strength of that alternate currency," he said in the interview posted on the RBI's website late on Friday.

Subbarao said he had studied the debate for the global currency, the alternatives for it and implications for the global and emerging economies.

Countries such as China called for a debate at the G8 summit on proposals for a new global reserve currency to replace the dollar to reflect the shifting balance of power in the globalised economy.

India's foreign secretary has said the country, Asia's third largest economy, would be willing to discuss the proposal and a key policy adviser had said the country's currency basket could be diversified.

Subbarao said the debate would likely carry on longer than anticipated before countries reach an agreed view on a "minimum acceptable programme".

For full text of the interview click on: ">here

The immediate challenge for the Reserve Bank would be to create a stage for 9 percent growth amid price and financial stability and the country should focus on increasing infrastructure investment, Subbarao said.