Talk:Reserve currency/Archive 1

Archive 1

Commodity prices

I don't see why this is true: This permits the issuing country to purchase the commodities at a significantly cheaper rate than other nations, which must exchange their currency with each purchase. It also permits the government issuing the currency to borrow money at a better rate, as there will always be a larger market for that currency than others. If Germany wants to buy oil priced in dollars, it converts its money into dollars and buys it. If the Euro is high against the dollar, oil is relatively expensive for them; if the Euro is low against the dollar, oil is cheap. Can this either be backed up or removed? Thanks --Afelton 15:21, 24 January 2006 (UTC)

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If the euro is high against the dollar, then one euro can buy more dollars and then more oil. But the point of the paragraph is more precisely to explain that whatever the level of a currency like the euro is, it has to be converted to buy US dollars and this operation has a cost.

For interest rates, the fact that the dollar is a reserve currency means that it is used for other purposes than trade with the US or capital investment to or from this country. Other countries demand this currency to build up reserves. As a result, a very high trade deficit for instance will impact the US dollar but much less than it would be the case for any other currency.

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"This operation has a cost"

As of March 15, 2006, the bid/asked spread for exchange of Dollars to Euros (assuming large transaction size) is .0002 (Bloomberg Market Data), or .02% of the value of the transaction. I would say that the comment "oil is relatively expensive" is true, but at a .02% higher price isn't going to kill anybody's pocketbook.

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"Killing the Pocketbook"

I've never studied economics formally so I may have this slightly off, But I think it works something like this...

As top currency, the US can print pieces of paper (at virtually no intrinsic cost) which China, Japan, etc. are happy to exchange for cars, clothes, oil, etc. (i.e. stuff with real intrinsic value) based on an implied promise that US Dollars will continue to be a strong currency and so the intrinsically valueless pieces of paper they have in their bank vaults will remain exchangeable for real goods at some point in the future.

Kind of like a huge credit card. The risky thing is the transition from "Top Currency" to "Not Top Currency" because with ~1.5 Trillion dollars in debt to China & Japan alone, either could wipe out the US Economy on a whim with the words "Sell US T-Notes"

Cambridgegames 20:13, 9 September 2006 (UTC)

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"The Euro ... may also dominate alongside the dollar."

I reworded the previous version which had a double 'most likely' clause, but (I hope) preserved the sense of a 'dual-dominant' option. Is this a commonly accepted theory? If so, could we have a reference for it. My understanding was that Reserve Currency Status was naturally astable, so while we might stay a Dollar world, or end up in Euros, Yen or even back in Gold, it'd be unlikely for us to stay split across several currencies for very long.

Cambridgegames 20:50, 9 September 2006 (UTC)

Swiss Franc

Why the article says 'perceived stability'?Its an real stability. Just look at charts of CHF against just about any major currency in the past five years. I didnt moved significantly(up or down) against them except the USD which was very weak. Plus the Swiss stance on wars and the fact they only devalued one time in their history(in the 30's when every major currency devalued) makes the swiss franc a real stable currency. Tradingbr 18:27, 21 December 2006 (UTC)

Agree, but political power and trade volume also matter. --ChoChoPK (球球PK) (talk | contrib) 19:07, 21 December 2006 (UTC)

Seigniorage?

The article said:

For this reason, the US dollar is said to have "reserve currency status", making it possible for the United States to run significant trade deficits (financed by seigniorage) with limited economic impact (see currency crisis)...

I don't understand this. The U.S. trade deficit is mainly financed by the sale of stocks, bonds, and real estate--right? At least, that's what Wikipedia says elsewhere. So I changed the word "significant" to "higher". But I have to wonder whether this idea is widely accepted at all. I hope someone more knowledgeable will review this. --Jorend 21:23, 23 January 2007 (UTC)

The idea that US deficits are financed by seignorage (issuing of new currency) seems very wrong; were this to be the case the USD would experience runaway inflation. At the very least this argument needs to be better developed. —Preceding unsigned comment added by 69.176.211.26 (talk) 13:20, 18 October 2007 (UTC)

Incorrect data for 2006

according to the link of the IMF the share of each currency was the following:

currency	share
dollar	0,647466381
euro	0,257987049
pound	0,044326689
yen	0,031923576
CHF	0,001767927
other	0,016528377

as for september of 2005 the share of each currency was: 0,66310335 0,2440334 0,036006355 0,038058584 0,001451461 0,017346122 which is almost equal to the data given by the ECB paper (notice that it does not give the data at the end of 2005), so if both ECB and the IMF give the same numbers, then the data for 2006 of the IMF should be valid.

Could anyone correct the data for 2006? Sdnegel 11:29, 9 april 2007 UTC

Hello, just there is no correction of this false values. Due to I don't know how to edit, again hint that the numbers are false at least since april. --129.13.108.115 08:50, 27 August 2007 (UTC)

Table is not "expressed in US dollars"

The title "Percentage of global currency reserves held in the particular currency, expressed in US dollars" is incorrect, it is not in US dollars, it is in percent. Should read "Percentage of global currency reserves held in the particular currency.". But I can't figure out how to edit this table, can anybody help? TiffaF 15:16, 11 June 2007 (UTC)

I had a look and the entry for the table appears missing in edit, cant find any trace of it as was gonna add Q1 2007 data to the table listed as such as it exists in the references now 83.104.138.141 05:44, 21 September 2007 (UTC)

Dear 83.104.138.141, the original is at Template:Reserve currencies, and you can edit it there.

I have again removed the text "expressed in US Dollars" Michael Zimmermann objected the first time I did it, but he didn't get back to me. As far as I can see this table is pure %, no units. Which currency you convert the others to to compare them is irrelevant, you should always get the same answer. See the discussion on his user page. TiffaF 07:28, 9 October 2007 (UTC)

"It also permits the government issuing the currency to borrow money at a better rate, as there will always be a larger market for that currency than others."

A larger market doesn't imply a lower borrowing cost. And USD rates are higher than Euro and Yen rates and have been for some time so this comment seems pretty blatantly false. —Preceding unsigned comment added by 69.176.211.26 (talk) 13:23, 18 October 2007 (UTC)

Decline on "Other" from 97-99

What was the sharp decline of the group "Other" between 1997 and 1999, from 10.2% to 1.6%. Was it a eneral shift towards US Dollar, or a few specific currencies declining? --Apoc2400 (talk) 18:56, 1 March 2008 (UTC)

I see now that going from 6.1% to 1.6% between 98 and 99 was probably various European currencies becoming the Euro, but how about 97-98? --Apoc2400 (talk) 18:59, 1 March 2008 (UTC)

Pound as a reserve currency pre-US dollar

Is there any evidence that the British pound was a major reserve currency? I understand that gold used fulfill this role. 193.132.242.1 (talk) 17:23, 19 May 2008 (UTC)

Please update more regularly

We r now in year 2009. Did the watch stopped in 2007? --84.56.240.53 (talk) 21:34, 4 January 2009 (UTC)

Yes, I also want to know the statistics for 2008. Are you ready for IPv6? (talk) 10:45, 14 January 2009 (UTC)

The statistics for the full 2008 year are not available yet. When they are I will add them. You can get these statistics from the IMF website, or here: http://www.imf.org/external/np/sta/cofer/eng/index.htm Americanjoe1776 (talk) 18:22, 14 January 2009 (UTC)

Does this link pass the test?

Are "Reuters Columnists" op-eds or blogs? http://blogs.reuters.com/columns/2009/10/06/a-cabal-plotting-against-the-dollar/ Hcobb (talk) 15:01, 7 October 2009 (UTC)

Citation needed

Other nations and groups of nations have expressed their desire to see their currencies (or future currencies) be used as reserve currencies, such as Russia, People's Republic of China, and the Gulf Cooperation Council.

One hell of a sweeping statement that I certainly have never even hear implied. This has called for an international world currency, not of their own but a newly developed world currency. If someone can provide primary quoted citation, not secondary nay-say, for this statement then fine, otherwise I will be taking it down later. —Preceding unsigned comment added by 41.145.143.213 (talk) 22:50, 3 November 2009 (UTC)

Canadian Dollar

According to both what I have heard and the Canadian dollar article, the Canadian dollar is a reserve currency. Cameron Nedland (talk) 05:32, 5 November 2009 (UTC)

It's roughly on a par with the Australian dollar, isn't it? (5th and 6th most traded after the big four (USD, EUR, GBP and JPY)). They probably should have a common section - they're both natural resources currencies with regional importance. 46.14.56.48 (talk) 19:08, 12 October 2011 (UTC)

Remove Swiss

There are many currencies crawling around 0,1 percent and sentimental reasons should not count when it comes to Swiss currency as this currencies high time is gone long ago. --92.74.26.115 (talk) 10:56, 26 December 2009 (UTC)

The 'sentimental reason' does not originate with WP editors. However, the statement should certainly be referenced to some reliable source. Kbrose (talk) 18:10, 26 December 2009 (UTC)

Please edit "History"

I can't make the edit because it is quite unclear what the author is saying. What/when are "those times"? "a similar picture" to what. This is a bit of a mess.

"Reserve currencies are widely recognized and used for international transactions. The fact that money in those times consisted of precious metals and was not printed on notes supports this. In the 1800s a similar picture was in place with the US dollar, Russian ruble, and the unified German Reichmark, being added to the list in the very late 19th century." 99.56.63.104 (talk) 06:33, 17 October 2010 (UTC)Eli

Australian Dollar

The Aussie Dollar in many sources is listed as a reserve currency, normally alongside the Canadian Dollar. Many countries hold reserves in Aussie Dollars, and recently the usage of the Australian Dollar as a reserve currency has sky rocketed as has that of the Canadian Dollar, and the Euro, at the expense of the very weak United States Dollar, which many countries have sold billions of dollars worth. Plus the Swiss Franc is not being used as a reserve currency, nowadays, as much as the Canadian Dollar, or even the Aussie Dollar. So the Australian Dollar should be listed down near the Canadian dollar and the Swiss Franc. $1000000000ten0one1 (talk) 08:09, 28 October 2010 (UTC)

ARTICLE SABOTAGE: SOMEBODY PUT INDIAN RUPEE INTO CHART

THIS LINE NEEDS TO BE TAKEN OUT ASAP:

INR 59.0% 62.1% 65.2% 69.3% 70.9% 70.5% 70.7% 66.5% 65.8% 65.9% 66.4% 65.7% 64.1% 64.1% 62.2% —Preceding unsigned comment added by 68.44.225.48 (talk) 04:58, 30 January 2011 (UTC)

Dead link

The link No. 28 should be: http://money.cnn.com/2011/02/10/markets/dollar/index.htm — Preceding unsigned comment added by 217.67.16.171 (talk) 19:18, 20 April 2012 (UTC)

Gold

Why is Gold not included in the list? Nowadays people are even speaking of "petrogold" instead of "petrodollar", look at this: http://www.businessinsider.com/how-iran-evades-oil-sanctions-with-gold-2012-10 --91.6.103.196 (talk) 15:04, 28 October 2012 (UTC)

Yuan

It might be a good idea to update this section, even if to bring it up to 2013/2013 standard of the referenced article. There are now significant developments which make the summary text here rather misleading, e.g. https://www.hsbc.com/news-and-insight/2014/rmb-next-reserve-currency — Preceding unsigned comment added by TcomptonMA (talk • contribs) 03:23, 5 September 2014 (UTC)

Exactly, A number of countries are engaging in Currency Swaps with China, with the intent to by-pass the dollar in trade. There are now 28 countries and the list continues to grow. https://en.wikipedia.org/wiki/Internationalization_of_the_renminbi

AUD?

Australian dollar is apparently close to becoming a reserve currency (or possibly already is). I'm not sure of exact figures, but I came across this article in the sources for the Australian dollar page: http://en.ria.ru/business/20120126/170960429.html The IMF is apparently also getting a piece of the Aussie from March 2013: http://www.theaustralian.com.au/business/economics/imf-poised-to-list-aussie-dollar-as-a-reserve-currency/story-e6frg926-1226520723418 I guess the AUD is possibly considered one of the new safe haven currencies in these turmultuous times. 203.129.23.146 (talk) 11:04, 3 February 2013 (UTC)

That could well be true, something like a reserve currency without being officially declared so. I say this because AUD has been so high for so long that it hurts some industries. Reasons why it remains persistently high have never really been given, but between the lines it can sometimes be detected that it's not us who are so pretty, it's the others who are less pretty.

Startled by this sentence in the article "As of 2013 the United States dollar is the world's reserve currency, ...." Who said so, when and why? It looks like someone determined that, but the source is not given, no date, no organisation - could this be wishful thinking? 144.136.192.18 (talk) 04:22, 28 October 2013 (UTC)

Read the article; the Bretton Woods conference after WW2 decided the US Dollar would replace the British Pound as the world's reserve currency.[Special:Contributions/2601:1C1:C100:78E5:F8DA:4DAC:D78E:F7BC|2601:1C1:C100:78E5:F8DA:4DAC:D78E:F7BC]] (talk) 02:47, 11 February 2016 (UTC)

say what?

In the opening I see this...

"However, the U.S. dollar's status as a reserve currency, by increasing in value, hurts U.S. exporters."

This makes no sense. Looks like an edit gone bad.

67.169.141.146 (talk) 13:15, 1 April 2017 (UTC)Rich

Sterling and Thatcher

In the 70s or 80s durign a financial crisis Thatcher announced that Sterling would cease to be a reserve currency. I believe it was then the second most held reserve, but regardle4ss tis event should be documented here if possible.. Rich Farmbrough, 11:36 19 May 2009 (UTC).