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World Bank President:Dollar's Reserve-Currency Status Long-Term Issue

WASHINGTON -(Dow Jones)- World Bank President Robert Zoellick reiterated Wednesday that the dollar's status as a reserve currency isn't a given, but he said that's a longer-term issue.

"I think in the near term, the U.S. dollar remains the principal reserve currency," Zoellick told reporters after meeting with lawmakers on Capitol Hill.

The currency's recent slide is due in part to a reversal of the flight to quality in U.S. assets during the crisis over the past year, he said.

"Over the long term, Americans would be wise not to take that reserve-currency status for granted," said Zoellick. The U.S. ability to deal with rising budget deficits, as well as monetary policy, will determine whether the dollar can maintain its status.

China and Russia have been the major drivers behind calls for an alternative reserve currency, and Zoellick helped fuel that debate last month when he predicted the dollar would face increasing competition in that role.

-By Tom Barkley, Dow Jones Newswires; 202-862-9275; tom.barkley@dowjones.com

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  10-21-091242ET
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