Wednesday, May 12, 2004

Since I have been posting on a really wide array of topics, I have decided that I need to get some follow up posts in place, Here is the first one of them

Following up on an earlier piece I had written about the possibility of the dollar being replaced by the Euro on May 04, Well when I was doing some research work on it, I came across this article in business week called the Super Euro

Excerpts from the article

By the end of last year, the dollar's share of Moscow's reserves had fallen below 75%. The Central Bank's new love: the euro, which has gone from under 10% of reserves to over 20%. Russia is buying euros, says bank First Deputy Chairman Oleg Vyugin, to diversify its risks, improve its returns, and reflect the fact that the euro zone is by far Russia's most important trading partner.

The story is the same across the globe. Money traders say that institutions as diverse as Bank of Canada, People's Bank of China, and Central Bank of Taiwan are giving more weight to the European currency. By the end of this year, they predict, the euro could account for 20% of global foreign currency reserves, which today amount to a cool $2.4 trillion. Little more than a year ago, the euro made up just 10%

Indeed, the euro has, for the moment at least, stilled the complaint that it would never match the strength and stability of the Deutschemark, which in its heyday was the world's No. 2 reserve currency. In the first three years of its life, the euro never reached the 13% of global reserves made up by the Deutschemark and other former euro-zone currencies.


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