Bloomberg.com | Dollar Falls Versus Aussie as Recovery Signs Spur Risk Demand

The Swedish krona and Canadian dollar also rose against the US currency. The pound snapped five days of gains versus the euro after Royal Bank of Scotland ...

Rian.ru | Turkey Drops Dollar in Trade with China, Iran

ANKARA, October 28 (RIA Novosti) - Turkey is switching to national currencies in trade with Iran and China, ending dependence on the U.S. dollar and the euro for about 20% of its commodity turnover, local media reported on Wednesday.

Turkey has already switched to settlements in national currencies with Russia amid weakening confidence in the greenback as the world's major reserve currency. The move was initiated by Turkish President Abdullah Gul during his visit to Moscow in February.

Turkey's decision to make settlements with Iran and China in national currencies was announced during a visit to Iran by Turkish Prime Minister Recep Tayyip Erdogan. The Turkish premier told a Turkish-Iranian business forum on Tuesday that the countries had prepared a legal framework for transition to settlements in national currencies.

"We have adopted a necessary legislative act and are prepared for the transition," the Turkish newspaper Milliyet quoted Erdogan as saying.

According to the paper, Turkey's trade with Russia, Iran and China exceeds $65 billion a year. Russia is Turkey's largest trade partner, with $37.8 billion commodity turnover registered last year.

Russian Prime Minister Vladimir Putin said on October 14 that Russia was ready to consider using the Russian and Chinese national currencies instead of the dollar in bilateral oil and gas dealings.

"We are ready to examine the possibility of selling energy resources for rubles, but our Chinese partners need rubles for that. We are also ready to sell for yuans," Putin said.

Britain's Independent newspaper reported in early October that Russian officials had held "secret meetings" with Arab states, China and France on ending the use of the U.S. dollar in international oil trade.

The countries are reportedly seeking to switch from the dollar to a basket of currencies including the euro, Japanese yen, Chinese yuan, gold, and a new unified currency of leading Arab oil producing countries.

The Independent said the meetings have been confirmed by Chinese and Arab banking sources, although Russian officials said they had no knowledge of the talks.

iStockAnalyst.com | Webinar Transcript: The War On The Dollar

The dollar's role as a reserve currency is already being challenged in Europe, in Asia, and in the Americas. The dollar's day of reckoning is already here. ...

FXStreet.com | People's Bank of China (PBOC) Official Says Euro & Yen Should Assume Larger Share of Global Reserves

Mon, Oct 26 2009, 11:35 GMT

The Overnight Express

The following is a summary of the main economic events from the weekend and Monday’s Asia-Pacific and European sessions:

• PBOC’s Zhou Hai writes that although the U.S. dollar should remain the global reserve currency, the share of the euro and yen should increase.

FULL ARTICLE

CRF.org | Council on Foreign Relations - Gauging the Dollar Decline

Governor Zhou's suggestion that the International Monetary Fund's Special Drawing Rights (sdrs) could be transformed into a major global reserve currency is ...

KoreaHerald.co.kr | Bank Of Korea mulling reducing the proportion of dollar-denominated assets in reserves, which currently stands at 64.5%

Tuesday, October 20, 109 - The weakness of the U.S. dollar has many policymakers in Asia's reserve-rich countries studying ways to reduce the portion of dollar assets in their funds, central bank officials and analysts said yesterday. They said Korea, whose foreign exchange reserves stand at $254.2 billion, is no exception.

They said the Bank of Korea is mulling reducing the proportion of dollar-denominated assets in reserves, which currently stands at 64.5 percent of the total fund.

"If the reserves are to be diversified, the process is unlikely to be not a speedy one," a BOK official was quoted as saying by Yonhap News.

Since the launch of the euro in 2000, the proportion of dollar assets in Korean foreign-exchange reserves dropped by an average 0.5 percent a year. According to U.S. data, Korea's holding of U.S. Treasury securities dropped to $27.2 billion at the end of 2009, from $39.2 billion two years earlier.

Critics, however, say the central bank should move more quickly to diversify out of dollar assets, with some insisting buying more gold instead.

"It is widely expected that the dollar will remain weak for the time being and gold prices will continue to rise, but the BOK is holding onto dollar assets," Rep. Lee Hye-hoon said during a parliamentary session earlier this week.

Korea is the world's sixth-largest holder of foreign reserves but its ranking drops to 56th when it comes to gold reserves. The nation holds 14.4 tons of gold. Gold makes up just 0.2 percent of the country's reserves fund.

China, the world's largest holder foreign reserves, has been building up gold reserves. It said in April that it holds 1054 tons of gold, up from 600 tons in 2003. The percentage of gold in its forex reserve is still less than 2 percent.

BOK Governor Lee Seong-tae, however, is cautious about expanding gold reserves.

"Gold has high price volatility and it is not more difficult to convert into cash," he said.

The price of gold, which was around $850 per ounce in 1980s, had dropped to $250 in 1990s and is now beyond $1,000, he said.

(milaya@heraldm.com)

By Lee Sun-young

AFP | UN calls for new reserve currency

ISTANBUL (AFP) - The United Nations called on Tuesday for a new global reserve currency to end dollar supremacy which has allowed the United States the "privilege" of building a huge trade deficit.

"Important progress in managing imbalances can be made by reducing the reserve currency country?s 'privilege' to run external deficits in order to provide international liquidity," UN undersecretary-general for economic and social affairs, Sha Zukang, said.

Speaking at the annual meetings of the International Monetary Fund and World Bank in Istanbul, he said: "It is timely to emphasise that such a system also creates a more equitable method of sharing the seigniorage derived from providing global liquidity."

He said: "Greater use of a truly global reserve currency, such as the IMF?s special drawing rights (SDRs), enables the seigniorage gained to be deployed for development purposes," he said.

The SDRs are the asset used in IMF transactions and are based on a basket of four currencies -- the dollar, euro, yen and pound -- which is calculated daily.

China had called in March for a new dominant world reserve currency instead of the dollar, in a system within the framework of the Washington-based IMF.