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Why Economists Worry About Who Holds Foreign Currency Reserves (Thinking Global)
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Official currency reserves of developing world countries almost quadrupled over the last decade to $2.9 trillion. Reserves of industrialized countries went up by 150%. In 2005 reserves went up by 18% for developing countries and declined 1.5% for developed countries. 70% of total currency reserves are in developing countries. This is a huge accumulation of reserves by developing countries in a short period. In 2005 74% of overall reserves were in U.S. dollars. The reserves help countries pay bills and make investments. For developing countries having sufficient reserves helps in two other ways. The reserves are a buffer in emergencies , and means countries like Brazil and S. Korea don't have to turn to the IMF or the U.S. for assistance. Another way this helps is for countries like China to be able to use their reserves to keep their currencies from appreciating and maintain a competitive edge in exports.
China's foreign exchange reserves and problems with inflation
05/09/2006
A recent IMF study points out that China's $3 trillion foreign exchange reserves are twice what China needs for traditional purposes such as supporting the economy in a financial crisis. According to China's central bank governor these reserves are making it difficult to control inflation. Experts also say this makes little sense for a developing country with low percapita incomes. Most of this money is invested in U.S. Treasury securities and is not put to productive uses.
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China Inflation Rises to a 19-Month High
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A Top Manager Resigns from Foreign Exchange Agency
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Russia's effort to prevent the ruble from collapsing in 2009
05/09/2006
Russia used up a third of its foreign exchange reserves to defend the ruble, from November 2008 to early February 2009, as the global financial crisis escalated.
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Russian Ruble Slips to 7-Month Low as Investors Grow Cold
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Russia Bonds Still Confront a Deep Chill
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Medvedev Chooses Critic for an Interview Debut
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Russian Ruble Hits Fresh Record Low Against Dollar
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Russian Ruble Fall to Fresh Lows
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Russia's budget deficit, the Reserve Fund and foreign investment
05/09/2006
The Reserve Fund, Russia's sovereign wealth fund, is now down to $26 billion. This would only cover about half of the 2011 budget deficit. The need for foreign investment to pursue economic growth, meet development needs, and for oil exploration in the Arctic.
Grouped Articles
Russia's Growth Pace Continues to Weaken
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Russia Looks to Borrow to Plug Funding Gap
Wall Street Journal 09/19/2013
Russia Prepared to Let Ruble Slide
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Competing Visions for Russia’s Economic Future
New York Times 05/22/2014
Putin Trumpets Economic Strength, but Advisers Seem Less Certain
New York Times 10/02/2014
Global Oil Glut Sends Prices Plunging
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Rapid erosion of Sovereign Wealth Funds in 2009
05/09/2006
The rapid erosion of sovereign wealth funds is another aspect of the situation surrounding the present financial crisis in the global economy. From one of many causes, declining oil prices, supporting currencies, supporting local banks, stimulus spending, declining exports, or bad investments in western countries, there has been arapid erosion of Sovereign Wealth Funds.
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Kuwait, Dubai Tackle Their Ills
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Grim Outlook for Japan Economy: Barclays Economist
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Oil's Crash Stirs Unrest in Russia as Slump Hits Home
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In Russia, Reserves Gain on Euro Rise
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Saudi Arabia's Kingdom Holding Reports Big Loss
Wall Street Journal 01/20/2009
Big Mideast Funds Scale Back Investments
Wall Street Journal 01/27/2009
China's foreign investment- 2011-2015
05/09/2006
Investments overseas by Chinese companies and the China Investment Corporation using China's large foreign exchange reserves.
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Chinese Car Maker's Favorite Passenger: Uncle Sam
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China's Shuanghui to Buy Smithfield Foods
Wall Street Journal 05/29/2013
Morgan Stanley to Help Finance Shuanghui Bid
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The Smithfield Deal: China Bringing Home the American Bacon
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China Brings Home the U.S. Bacon
Wall Street Journal 05/29/2013
Smithfield Deal: Past Chinese Acquisitions Bode Well
Wall Street Journal 05/30/2013
Lessons from the 1997 Asian Financial Crisis, the example of South Korea and other countries.
05/09/2006
The lessons S. Korea shares with the G20 from its banking crisis in the late 1990's, with nonperforming loans of banks at 40-50% of GDP according to the Federal Reserve Bank of Chicago. Banks had to be merged, closed or nationalized using BIS standards for reserves in a short time. It also led to asevere contraction in the Korean economy as banks not only stopped making loans but called in outstanding loans. This contraction reached minus 7% in the second and third quarters of 1998. The bigger challenge now is how to resolve the bad asset problem without seeing such huge hits to the American economy which would further depress the global economy and have unforeseen consequences. Already Comerice department estimates are for a 6.3% contraction in the US econmy for 4th quarter 2008.
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Seoul Forum Helps Heal IMF Wounds
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Emerging-Market Slide Tests How Much Nations Learned From Past
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In Japan’s Stagnant Decade, Cautionary Tales for America
New York Times 02/13/2009
Treasury’s Got Bill Gross on Speed Dial
New York Times 06/21/2009
A Year After a Cataclysm, Little Change on Wall St.
New York Times 09/12/2009
Bernanke’s Bid for a Second Term at the Fed Hits Resistance
New York Times 01/23/2010
China Investment Corporation (CIC) plans and strategies
05/09/2006
China's sovereign wealth fund with about $70 billion of the $200 billion in the fund allocated for foreign investments mostly of the portfolio kind.
Grouped Articles
Chinaâs Sovereign Wealth Fund Buys Shares in Major Banks
New York Times 10/10/2011
Low-Key Politician to Take Helm of China's $500 Billion Fund
Wall Street Journal 07/01/2013
Economist 08/21/2010
Central Huijin Raises $7.94 Billion in Bond Sale
Wall Street Journal 08/26/2010
China Fund Shifts Focus From Energy
Wall Street Journal 02/19/2014
China’s CIC Gearing Up Investment in Overseas Assets
Wall Street Journal 03/29/2015
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