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Iran, Venezuela attack the dollar

Stephen Beard Dec 18, 2006
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Iran, Venezuela attack the dollar

Stephen Beard Dec 18, 2006
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MARK AUSTIN THOMAS: The Iranian government has ordered its central bank to dump the country’s dollar reserves. And Venezuela has also cut its dollar holdings. From London, home of the world’s largest foreign exchange market, Stephen Beard reports.


STEPHEN BEARD: The Teheran government has reportedly instructed the Iranian Central bank to switch its $20 billion worth of reserves into euros.

Venezuela says it has already cut its dollar holdings by a hefty 15 percent. The proceeds have also been ploughed into the European currency.

In both cases, dealers say, the scale of the sales was largely motivated by hatred for the U.S.

Neil MacKinnon of the ECU currency fund management group does not expect many other central banks to follow suit since they don’t want to damage the value of their large dollar holdings.

NEIL MACKINNON: By exiting the dollar as well, they could easily precipitate a very sharp dollar decline which could also impact on their investments.

OPEC countries as a whole own $632 billion in reserve. The figure for China is now over a trillion.

In London, this is Stephen Beard for Marketplace.

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