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The U.S. dollar is still the world’s reserve currency: Barry Eichengreen

Friday, December 07, 2012

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Barry Eichengreen
From Komfie Manalo, Opalesque Asia:

The U.S. dollar is the world’s reserve currency, at least for the moment says Barry Eichengreen, George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California, Berkeley, Department of Economics.

In an interview with Sona Blessing for Opalesque Radio, responding to a question on the dollars continued viability as an international reserve currency, Eichengreen said, "In the short run there are no alternatives to the dollar. The dollar has the advantage that it is the incumbent as the only true global currency at the moment. It has the advantage that there are no obvious alternatives on the horizon. The euro could be an alternative but it will take time to solve the crisis in Europe and restore confidence in the euro. China's currency, the renminbi, is a potential alternative but it will take a decade, at least, for China to enhance the liquidity of its financial markets and internationalize its currency. The dollar is the only alternative out there. And the question is, "how long will confidence in the dollar be maintained? …"

Dollar as a safe haven currency Eichengreen said, "The dollar is the world’s safe haven." According to him a safe haven currency is a currency that has scale; it has to have a large economy so it is easy to get in and out. The market in securities in that cur......................

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