Stanley Fischer Undermined Role Of Dollar As Reserve Currency
DAVOS, Switzerland Mon Jan 31, 2011 (Reuters) – The U.S. dollar`s role as a reserve currency will diminish in the coming years as Asian economies like China grow and countries seek to diversify their monetary holdings, policymakers said on Friday.
The U.S. Federal Reserve`s policy of quantitative easing — essentially printing money — and a call by France to look at ways to wean the world off the dollar as the sole reserve money have put the U.S. currency in the spotlight.
“I`m more optimistic about the euro gaining strength as a potential reserve currency,” Bank of Israel Governor Stanley Fischer said during a panel discussion at the annual World Economic Forum in Davos, Switzerland.
“We ourselves are diversifying into currencies which we would never have put in the reserves before, including the Australian dollar and so forth,” he added. “I think people will diversify their reserves.”
In the above quote from Stanley Fischer, the new nominee for Vice Chairman of the U.S. Federal Reserve Bank, “We” does not mean America.