world's central banks are losing confidence in the dollar and transfer record amounts of dollar reserves into euros and Japanese yen, reported Bloomberg.
As expected, this could lead to a further decline of the dollar after the collapse of the outcome of the last two quarters, which was the highest over the past two decades: in April-September, the dollar lost 10.3%, its steepest drop since 1991.
In the third quarter of the world central banks have increased their foreign exchange reserves to a record in 2003 with $ 413 billion - to $ 7.3 trillion. Thus in the second quarter, 63% of new contributions were invested in the euro and yen, according to Barclays Capital.
similar reaction of world central banks might be expected, since the U.S. government has tacitly endorsed the weakness of the national currency to support exports for as long as the weak dollar will not scare off new lenders, said Bloomberg.
world's central banks are more serious about diversifying, whereas in the past they were limited to only talk about it - former analyst with the U.S. Federal Reserve and chief strategist at Barclays in the U.S. national currency Steven Englander. - It looks like they really give up the dollar .
Since 1999, the average share of dollar assets in the new currency reserves of central banks of the world was 63%, but in the second quarter it fell to 37% in the third quarter, a trend that apparently has accelerated, said S. Englander.
dollar index ICE, taking into account the quotation of the dollar to the currencies of 6 major U.S. trading partners, is separated from the historic lows of 6 points - last week completed the figure at 75.77 points.
Industry executives and government officials outside the U.S. are beginning to talk about that weakness of the dollar causes damage to the economy of their countries.
According to Bank of America-Merrill Lynch, developing countries have sold about $ 30 billion of assets in exchange for the euro, yen and other currencies since March. This helped reduce the share of dollar in foreign exchange reserves of central banks that publish official information on their reserves, in the second quarter to 2.2 percentage points - up to 62,8% at June 30, 2009, said the International Monetary Fund.
Diversification of the exit from the dollar willaccelerate - sure Monetary manager Akettu Gestuekker SGR SpA in Milan Fabrizio Fiorina. - People are buying the euro, not because they need the currency, but because they want to get rid of the dollar. In the long term U.S. will not be one mighty power, which they once were.
But not all analysts agree with this view: according to Christophe Kinda of Frankfurt Trust, reducing dollar-denominated assets - a temporary phenomenon, and the trend will change as soon as the Federal Reserve will raise interest rates, which currently are at the zero mark ( range from 0 to 0,25 %).
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