The Big Question

THE BIG QUESTION

Will the dollar remain the reserve currency of choice?

Thanos Papasavvas, head of currency management, Investec Asset Management Following the crises of 2000, which saw the aftermath of the dotcom bubble-burst, 9/11, and recession, central banks around the world tried to diversify their reserves out of predominantly dollars to other major currencies such as the euro. Policymakers globally took emergency policy actions. In the US for example, particularly affected by these crises, Greenspan cut rates to 1% and the dollar was allowed to weaken (a policy of ‘benign neglect') making US exports more attractive abroad, thus helping the recovery. ...