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Central Banks in Asia Prop up Dollar

• Digital Journal
 Currency traders have confirmed that the central banks of South Korea, Taiwan, the Philippines and Thailand were amongst those buying the dollar.
Hong Kong, Singapore, Malaysia and Indonesia were other countries identified as buyers of a currency which has been dumped by traders as the prospects of a sustained economic recovery have improved.
It is thought that the central bank in Russia was also acquiring the dollar at a time when the U.S. currency was hitting a 14-month-low against a basket of currencies.
As the BBC reports, during the global financial meltdown the dollar was considered as a safe haven by those operating in the currency markets. But now there is a perception that retreating to such a safe haven may no longer be necessary.
The central banks themselves appear reluctant to speak about their interventions, with the exception of the Bank of Thailand, New York hedge fund Vice-Chairman, Jonathan Clark of FX Concepts, as saying:
The U.S. is willing to talk about a strong dollar, but not willing to do anything about it. If you're not going to back up words with actions, it's just talk
There appears to be the usual mixture of opinions as to what a weaker dollar could mean.
A healthy "rebalancing" of the global economy resulting in the U.S exporting more and the likes of China importing more is one scenario that is being envisaged.
Whilst a more pessimistic view is that a destabilization of the financial system could occur. Stanford economist John Taylor considers destabilization a possibility, explaining:
With the exploding federal debt, the enlarged Fed balance sheet, and proposals by (some) countries to look for dollar substitutes, a policy of benign neglect is particularly risky now and could lead to more instabilities

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