The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Foreign Exchange

China boosts the anti-dollar

Last week, most of us laughed when news broke that Russia was seeking an expansion of the IMF’s SDR. This week, China joined the call when the governor of its central bank, Zhou Xiaochuan, posted an essay on the topic on the People Bank of China’s website. Poor old Tim Geithner, the US Treasury secretary, was clearly wrong footed by the suggestion. His initial reaction, along with Federal Reserve Chairman Ben Bernanke, was to dismiss the idea, but he then backtracked and said it was worth considering. Responding to a question at a Council of Foreign Relations event in New York, he said: “As I understand it, it’s a proposal designed to increase the use of the IMF’s Special Drawing Rights. I am actually quite open to the idea.” The result was inevitable. The dollar got a kicking. The main beneficiary was the euro, which is rapidly assuming a new moniker: the anti-dollar.


While it is probably fair to debate just why China holds so many of its reserves in USD-denominated assets, it is possibly a dialogue that officials close to the US administration should avoid. But that didn’t stop the venerable Paul Volcker – who despite his dotage is a special adviser to Barack Obama – from stating: “They [China] ignore the fact that they didn’t have to buy those dollars in the first place, so they contributed to the problem.”


You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree