Tuesday, November 20, 2012

Australian Dollar set to become a Reserve Currency

From SMH.com

Original source

The Australian dollar looks set to be classified as an official reserve currency by the International Monetary Fund, in a sign of the dollar's rising importance on global money markets.

With heavy buying by foreign central banks thought to have supported the Aussie dollar in recent months, the fund is considering whether to add it and the Canadian dollar to its list of official reserve currencies.

Today, only the US dollar, euro, pound, yen and Swiss Franc are classified as official reserve currencies – those held in large quantities by foreign governments.

But buried in a statistical report published late last week, the fund said it was considering publishing data on the official reserve holdings of Australian and Canadian dollars because of the growing foreign interest in these currencies.

The global head of interest rates strategy at Westpac, Russell Jones, said the IMF's move was recognition of the growing importance of the dollar for global investors.

"Over recent years, the Australian and Canadian economies have proved more stable and their financial sectors more robust than the more traditional safehavens of the US, the eurozone, Japan, the UK and Switzerland," Mr Jones said.

Read more: http://www.smh.com.au/business/aussie-dollar-set-to-join-the-big-league-20121120-29n9e.html#ixzz2Ck0p7Nr2

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