Nov. 6 (Bloomberg) -- The International Monetary Fund’s Special Drawing Rights or the broader use of currencies including the yuan won’t replace the global reserve position of the U.S. dollar, according to Pacific Investment Management Co. executives.

Such types of reserve assets will “at the margin” supplement the central role of the dollar, Pimco’s chief executive officer Mohamed El-Erian and executive vice president Ramin Toloui wrote in a Nov. 5 column in the Financial Times.

China, India and Russia have called for a replacement to the dollar as the main reserve currency after the financial crisis sparked by the collapse of the U.S. mortgage market led to the worst global recession since the 1930s. Concerns about the U.S. economy and rising government debt have pushed the trade-weighted Dollar Index down 6.9 percent this year.

“It has become fashionable to speculate on the future of the dollar as the world’s reserve currency,” the Pimco executives wrote. “The dollar is part of a bigger picture that concerns the evolving role of the U.S. as the sole provider of a range of global public goods. At a time when the global system needs such anchors, this uncertainty raises a set of importance policy issues.”

El-Erian and Toloui identified seven public goods: acting as a consumer of last resort; coordinating macroeconomic policies; supporting a stable system of exchange rates; acting as a lender of last resort; providing counter-cyclical long-term lending; offering a AAA asset to benchmark instruments and activities; and supplying deep and predictable financial markets.

‘Unquestioned Provider’

“On the eve of the crisis, the U.S. was the unquestioned provider of all these public goods,” they said. “With the crisis having originated at the core of the global system rather than the periphery, almost every one of them is weaker.”

The U.S. can strengthen its role in supplying some of the public goods, such as reestablishing the credibility and predictability of U.S. financial markets, they said. That will require reforms in supervision and regulation, as well as reining the budget deficit and minimizing the growth of its government debt.

The role that the U.S. has played as a driver of global growth needs to be replaced, the executives said.

“This role is now constrained by the debt of U.S. households,” they wrote in the column. “A sustainable global economy needs other major sources of internal demand, particularly among economies such as China that have historically focused on export-led growth.”

Group of 20

The Group of 20 nations and the IMF, with its new reform agenda, can be a joint-provider with the U.S. in the coordination of macroeconomic policies, El-Erian and Toloui said. While the move to make policy coordination more inclusive is positive, they said the “jury is still out” if such forums can resolve differences.

“One key risk is that key actors will resist these secular changes and seek to reconstitute an outmoded system that no longer fits post-crisis realities,” they said. “At the other extreme is the risk that major powers go their own way, forsaking effective coordination of policies in favor of more nationalistic moves such as aggressive currency management or trade and financial protectionism.”

To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net

Last Updated: November 5, 2009 23:43 EST