[Shadow_Group] Fw: India, China And Others Dumping US Dollar

[shadowgroup-l at lists.resist.ca]

rense.com

India, China And Others 
Dumping US Dollar
To Buy Euro 
By Bala Vaddi Special 
Correspondent 
IndiaDaily.com
11-26-4
 
The India, China and other countries have started dumping the US Dollar
quietly and buying the Euro. That has put a very serious pressure on the
US Dollar. Chinese and Indian central bank officials denied such reports.
But Foreign exchange traders say they are quite convinced of Indian and
Chinese moves. According to some traders, there are many other countries,
especially oil rich Middle Eastern countries, running away from dollar. 
  
Reserve Bank of India (RBI) Governor Y.V. Reddy said the composition of
the country's foreign exchange reserves could change when asked on
Wednesday if the bank was considering boosting its holdings of the
strengthening euro. The central bank does not give a breakdown of its
reserves -- the world's fifth largest -- but analysts said it may already
have reduced the proportion of dollar holdings and would likely continue
to do so. India's reserves, which comprise dollars, euros, sterling and
yen in undisclosed proportions, have risen by nearly $23 billion so far
in 2004 to a record $123.5 billion. 
  
"The question of composition of reserves ... it's a very dynamic
situation. You can't take a view on a daily basis," Governor Y.V. Reddy
told reporters on the sidelines of a news conference. 
  
The dollar has long been held as a reserve currency, but the single
European currency hit a record high against it on Tuesday, and again on
Wednesday, after the Russian central bank said it could review the share
of euros it holds among its $113 billion in reserves. Asian central banks
have been among the largest buyers of dollars as the economic tide turned
in their countries' favour leading to massive investment and trade
inflows. These banks were partly looking to build up their ammunition
following a crisis in 1997 and to protect their trade competitiveness. 
  
But the U.S. unit has declined sharply because of doubts about the
fundamentals of the U.S. economy, which is running wide fiscal and trade
deficits. It has fallen nearly 4.5 percent against the euro so far in
2004. 
  
Copyright© 1997-2005, Indiadaily.com 
  
http://www.indiadaily.com/editorial/11-27-04.asp<http://www.indiadaily.com/editorial/11-27-04.asp>

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