ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Calcutta Diary

September 23, 1972 strength of the dollar, as reflected by the US balance of payments. Unless the wide US balance of payments gap disappears without much delay, the official dollar holdings of other countries would continue to swell and the dollar would soon get branded as "bad money" both as a medium of exchange and as a store of value. The US has made it abundantly clear that there is no question of the dollar being made convertible until it has achieved a sizeable payments surplus. In this situation, all the comfort that the IMF report offers is that the realignment of currencies resulting from the Smithsonian agreement, "will, in due course, lead to the restoration of international payments equilibrium

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