Economy

A dozen of cash-strapped property firms, including China Evergrande Group and Kaisa Group, were invited to the meeting on Tuesday, two of the sources said.The People’s Bank of China (PBOC) encouraged commercial banks at the meeting to offer new loans and extend existing loans to developers, the sources said.Five national asset management companies were also present at the meeting, the sources added.China Securities Journal first reported the meeting, saying the developers which attended included Zhongliang Holdings and Yango Group.Kaisa declined to comment. PBOC, Evergrande, Zhongliang and Yango did not respond to requests for comment.Beijing has signalled there would be more government support for the embattled sector after bond payment defaults by Evergrande and other property developers rattled global markets.But China’s pledges to shore up the industry have done little to boost prospects, developers have said, as they struggle to access funding and many local government authorities remain reluctant to ease development rules.Two developers which attended Tuesday’s meetings said on Monday they were not very optimistic about prospects for securing more financing from banks. More

The investment bank said that while the euro area economy had proved resilient, it faced weakness ahead with energy flows from Russia likely to be significantly reduced and headwinds from China where strict measures to contain COVID-19 are weighing on growth there.In a note published Monday, Morgan Stanley said it had now lowered its 2022 euro area GDP forecast to 2.7% from 3% previously and shaved 1 percentage point off its 2023 growth forecasts to 1.3%.”Despite the resilience in economic activity shown so far against geopolitical headwinds, we think more material impacts will show in the second half of the year, through various channels of transmission,” the note said. More

The United States spent more on its policy response than other advanced economies. Now economists are revisiting how that worked.The United States spent more aggressively to protect its economy from the pandemic than many global peers, a strategy that has helped to foment more rapid inflation — but also a faster economic rebound and brisk job gains.Now, though, America is grappling with what many economists see as an unsustainable worker shortage that threatens to keep inflation high and may necessitate a firm response by the Federal Reserve. Yet U.S. employment has not recovered as fully as in Europe and some other advanced economies. That reality is prodding some economists to ask: Was America’s spending spree worth it?As the Fed raises interest rates and economists increasingly warn that it may take at least a mild recession to bring inflation to heel, risks are mounting that America’s ambitious spending will end up with a checkered legacy. Rapid growth and a strong labor market rebound have been big wins, and economists across the ideological spectrum agree that some amount of spending was necessary to avoid a repeat of the painfully slow recovery that followed the previous recession. But the benefits of that faster recovery could be diminished as rising prices eat away at paychecks — and even more so if high inflation prods central bank policymakers set policy in a way that pushes up unemployment down the road.“I’m worried that we traded a temporary growth gain for permanently higher inflation,” said Jason Furman, an economist at Harvard University and a former economic official in the Obama administration. His concern, he said, is that “inflation could stay higher, or the Fed could control it by lowering output in the future.”The Biden administration has repeatedly argued that, to the extent the United States is seeing more inflation, the policy response to the pandemic also created a stronger economy.“We got a lot more growth, we got less child poverty, we got better household balance sheets, we have the strongest labor market by some metrics I’ve ever seen,” Jared Bernstein, an economic adviser to President Biden, said in an interview. “Were all of those accomplishments accompanied by heat on the price side? Yes, but some degree of that heat showed up in every advanced economy, and we wouldn’t trade that back for the historic recovery we helped to generate.”Inflation has picked up around the world, but price increases have been quicker in America than in many other wealthy nations.Consumer prices were up 9.8 percent in March from a year earlier, according to a measure of inflation that strips out owner-occupied housing to make it comparable across countries. That was faster than in Germany, where prices rose 7.6 percent in the same period; the United Kingdom, where they rose 7 percent; and other European countries. Other measures similarly show U.S. inflation outpacing that of its global peers.The Rise of InflationInflation has risen worldwide in the past year, but the increase has been fastest in the United States.

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Change in consumer prices from a year earlier
Note: Euro area and U.K. data are Harmonised Index of Consumer Prices. U.S. data is the Consumer Price Index excluding owners’ equivalent rent.Sources: U.S. Bureau of Labor Statistics, O.E.C.D., EurostatBy The New York TimesThe comparatively large jump in prices in America owes at least partly to the nation’s ambitious spending. Research from the Federal Reserve Bank of San Francisco attributed about half of the nation’s 2021 annual price increase to the government’s spending response. The researchers estimated the number, which is imprecise, by measuring America’s inflation outcome compared with what happened in countries that spent less.“The size of the package was very large compared to any other country,” said Òscar Jordà, a co-author on the study.Understand Inflation in the U.S.Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Your Questions, Answered: Times readers sent us their questions about rising prices. Top experts and economists weighed in.Interest Rates: As it seeks to curb inflation, the Federal Reserve announced that it was raising interest rates for the first time since 2018.How Americans Feel: We asked 2,200 people where they’ve noticed inflation. Many mentioned basic necessities, like food and gas.Supply Chain’s Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Here’s how the crisis unfolded.The Trump and then Biden administrations spent about $5 trillion on pandemic relief in 2020 and 2021 — far more as a share of the nation’s economy than what other advanced economies spent, based on a database compiled by the International Monetary Fund. Much of that money went directly to households in the form of stimulus checks, expanded unemployment insurance and tax credits for parents.Payments to households helped to fuel rapid consumer demand and quick economic growth — progress that has continued into 2022. A global economic outlook released by the International Monetary Fund last week showed that America’s economy is expected to expand by 3.7 percent this year, faster than the roughly 2 percent trend that prevailed before the pandemic and the 3.3 percent average expected across advanced economies this year.That comes on the heels of even more rapid 2021 growth. And as the U.S. economy has expanded so quickly, unemployment has plummeted. After spiking to 14.7 percent in early 2020, joblessness is now roughly back to the 50-year lows that prevailed prior the pandemic.That’s a victory that politicians have celebrated. “Our economy roared back faster than most predicted,” Mr. Biden said in his State of the Union address last month. A major report from the White House on April 14 noted that the United States has experienced a faster recovery than other advanced economies, as measured by gross domestic product, consumer spending and other indicators.The Rebound in SpendingConsumer spending has recovered more quickly in the United States, even after accounting for faster inflation.

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Change in per capita household spending since fourth quarter of 2019
Notes: Quarterly data, adjusted for inflationSource: O.E.C.D.By The New York TimesBut increasingly, at least when it comes to the job market, America’s achievement looks less unique.Unemployment in the United States jumped much higher at the outset of the pandemic in part because America’s policies did less to discourage layoffs than those in Europe. While many European governments paid companies to keep workers on their payrolls, the U.S. focused more on providing money directly to those who lost their jobs.Joblessness fell fast in the United States, too, but that was also true elsewhere. Many European countries, Canada and Australia are now back to or below their prepandemic unemployment rates, data reported by the Organization for Economic Co-operation and Development showed.And when it comes to the share of people who are actually working, the United States is lagging some of its global peers. The nation’s employment rate is hovering around 71.4 percent, still down slightly from nearly 71.8 percent before the pandemic began.By comparison, the eurozone countries, Canada and Australia have a higher employment rates than before the pandemic, and Japan’s employment rate has fully recovered.The Rebound in JobsEmployment rates fell further in the U.S. than in many peer countries, and have not yet returned to their prepandemic level.

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Change in employment rate since fourth quarter of 2019
Note: Quarterly data, ages 15 to 64Source: O.E.C.D.By The New York TimesEurope’s more complete employment recovery may partly reflect its different regulations and different approach to supporting workers during the pandemic, said Nick Bennenbroek, international economist at Wells Fargo. European aid programs effectively paid companies to keep people on the payroll even when they couldn’t go to work, while the United States supported workers directly through the unemployment insurance system.That relatively subtle difference had a major consequence: Because fewer Europeans were separated from employers, many flowed right back into their old jobs as the economy reopened. Meanwhile, pandemic layoffs touched off an era of soul-searching and job shuffling in the United States.“You didn’t have as much motivation to reconsider your assessment of your work-life situation,” Mr. Bennenbroek said. “What we initially saw in the U.S. was much more disruptive.”Inflation F.A.Q.Card 1 of 6What is inflation? More

“There’s no need to fret” about current yen levels, Abe was quoted as saying at a meeting of ruling party lawmakers.Abe still yields strong influence in the ruling Liberal Democratic Party (LDP) as a proponent of big fiscal spending and aggressive monetary easing by the Bank of Japan.Among the key goals of his “Abenomics” stimulus policies, deployed a decade ago, have been to reverse a yen spike that had hurt Japan’s export-reliant economy. More

Good morning and welcome to Europe Express.There was a quick and near-audible sigh of relief last night among European leaders as French exit polls came in, confirming Emmanuel Macron’s second term as president. The feeling of Europe dodging a seismic populist upheaval — even as Marine Le Pen scored more votes than last time around — was reinforced at smaller scale in Slovenia, where voters ousted populist, anti-EU prime minister Janez Jansa (who was seeking to emulate Hungary’s Viktor Orban).But all is not well in Europe. The war in Ukraine is now in its third month and the rocket attacks on civilians have spread to the beautiful port city of Odesa. As the FT reported yesterday, Russian president Vladimir Putin has lost interest in diplomatic efforts to end his war with Ukraine and instead appears set on seizing as much Ukrainian territory as possible. With the French election now in the bag, diplomats in Brussels expect some movement on the sixth sanctions package, which includes measures targeting Russian oil. (The same goes for other files that have been put on hold pending Macron’s re-election, notably free trade deals)One key element for those upcoming sanctions to work will be enticing Russia-friendly countries, including India, if not to align, then at least not to scupper the restrictive regime. With European Commission President Ursula von der Leyen in New Delhi today, we’ll look at what goodies she plans to put on the table — trade, technology and weapons.Macron 2.0To the thumping tune of Daft Punk’s “One More Time”, supporters of Emmanuel Macron cheered and danced under the Eiffel Tower in Paris when early results showing his clear victory hit, writes Sarah White in Paris. Behind the party mood, even Macron enthusiasts had immediate concerns about what the next five years would bring and the tougher ride he likely has in store at home, after a strong showing for the far-right and with the prospect of a battle for parliamentary seats in the June elections. Macron has become the first French president in 20 years to win a second term, defeating his far-right challenger Marine Le Pen by around 58 per cent to her 42 per cent, according to early projections.That marked a more narrow margin than five years earlier in a first run-off between Macron and Le Pen, however, after a closely-run end of campaigning that brought to light strong pushback against the incumbent among leftwing voters too. Disappointed voters from Le Pen’s camp but also far-left supporters are already pushing to mount a strong challenge to Macron in the upcoming parliamentary elections, raising questions over how easily he will be able to pass reforms, including a pensions overhaul that proved unpopular on the campaign trail. For the European Union, the repeat victory of the fervently pro-EU Macron will prove a more immediate boost. Even as Le Pen dropped her call from five years ago for France to leave the bloc, the prospect of her victory had fuelled concerns of a different stance on Russia thwarting the unity of the 27 members and France leaving Nato’s military command structure (again). “Macron’s clear victory is likely to reassure the markets that the European dynamic will continue,” Frédéric Leroux, an investment committee member of asset managers Carmignac said in a note, pointing to likely short-term benefits for the euro. Congratulations were quick to arrive, and not just from the regular allies such as commission chief Ursula von der Leyen, who within minutes from the exit polls being announced tweeted her “delight” at the prospect of continuing an “excellent collaboration” and Italy’s Mario Draghi welcoming the “splendid news for all of Europe”. UK Prime Minister Boris Johnson and Poland’s premier, Mateusz Morawiecki, who in the past have both sparred with Macron, also congratulated him. Macron received his first call of the night from Olaf Scholz, the Elysée Palace said, with the German chancellor also voicing his support.“Your constituents also sent a strong commitment to Europe today,” Scholz said on Twitter. The French president, who had framed the election as a pro or anti-EU referendum, only made cursory mention of the next steps for Europe to supporters in his victory speech last night. He referred briefly to his “ambitious” project for the bloc and focused instead on trying to send a conciliatory message to voters of all bands at home. His music choice was on message, however: emulating his election night of five years ago, Macron, surrounded by a group of youngsters, walked up to greet supporters to a drawn-out rendition of “Ode to Joy”, the European anthem. Chart du jour: Mapping voters

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Read more here about how support for the French far-right has grown over the years and under Macron’s first term. Five years ago Macron beat Le Pen by 66 per cent to 34. In 2002, the centre-right incumbent Jacques Chirac defeated Le Pen’s father Jean-Marie Le Pen by 82 per cent to 18 after the Front National leader unexpectedly reached the second round.Wooing India If the EU wants to convince India to distance itself more from Russia it will have to offer tangible incentives — among them in the military arena, writes Sam Fleming in Brussels. Accordingly, the potential for greater provision of defence equipment is set to feature in conversations between Ursula von der Leyen, the commission president, and India’s prime minister Narendra Modi when they meet today. Von der Leyen is on her first visit to New Delhi since becoming commission president in 2019, and the Ukraine war is set to hang heavily over proceedings. While EU powers have been dismayed by Modi’s refusal to condemn Vladimir Putin’s invasion, they have not been particularly surprised. India has a longstanding relationship with Russia that dates back to the cold war, and anywhere from 60-85 per cent of its military equipment is estimated to be of either Russian or Soviet origin. To woo India away from Putin, the EU will have to be able to offer alternatives in key areas — most prominently arms and fertilisers. Options include streamlining defence procurement procedures, as well as facilitating industrial joint ventures between EU companies and India. None of this can be achieved overnight. But the EU is calculating that India — which has been diversifying its military procurement for some years — will be increasingly open to western equipment given expectations that the US and EU export controls will degrade Russia’s military technology base. The UK is also looking for ways of enhancing its defence relationship with India: its plans include accelerating the licensing process by which India procures weapons from Britain and offers of more joint military exercises and officer exchanges. For its part, the US, India’s Quad partner, designated India a major defence partner in 2016. The union hopes that the spectre of the “no limits” partnership between Putin and China’s Xi Jinping will serve as an additional incentive for New Delhi to pivot more to the west. The EU-India meetings will accordingly see the unveiling of a new trade and technology council, and confirmation of a round of negotiations in June aimed at a trade deal between the EU and US.What to watch today European Commission President Ursula von der Leyen visits IndiaThe European parliament’s trade committee votes on new rules tightening the scrutiny on foreign companies that receive subsidies. . . and later this weekEuropean Court of Justice rules on Airbnb case on WednesdayConference on the Future of Europe holds its final session on Friday and SaturdayNotable, Quotable

Swedish reluctance: Finland may be gunning for Nato membership ever since the war in Ukraine started, but its EU, non-Nato fellow Sweden is a much more reluctant follower. Led by a centre-left government deeply divided on Nato, Stockholm initially hoped it could avoid the question of membership and has in recent weeks changed tack because of Helsinki saying it was likely to join no matter what its neighbour did. Suisse inquiry: Norway’s $1.3tn oil fund, the world’s largest, has backed calls for a special audit at Credit Suisse and warned it would not absolve executives and board members from blame over multiple scandals as pressure grows on the Swiss lender to revamp its senior management. Turkish flight ban: Turkey has banned Russia’s armed forces from using its airspace to reach Syria in a bid to increase pressure on Vladimir Putin as Ankara tries to revive peace talks with Ukraine. More

Inflation in America is at a 40-year high, while household incomes, adjusted for rising prices, are falling at the fastest pace since the government began collecting data in 1959. That’s largely because the cost of food, fuel and housing has been climbing so dramatically. The price of commodities shows no sign of going down much anytime soon, thanks to the war in Ukraine, while a tightly constrained housing market in the US may keep prices higher than normal for the next few years, even as interest rates rise.But what about non-essential items? There one can see the beginning of a correction that may have surprising impacts for both business and markets. A recent report by Currency Research Associates, a US-based financial strategy firm, identified strong anecdotal evidence that a “global ‘buying strike’ is emerging”, as consumers around the world begin to cut back their spending on anything they don’t absolutely need.The evidence for this is strongest in developing countries, where the spike in the price of basics (which are even more expensive when priced in depreciating currencies) has led to rolling blackouts, food insecurity and what amounts to a “removal” of hundreds of millions of people from the global consumer economy. Now rich countries may be in for some of the same. Residents of New York and New Jersey, for example, owe more than $2.4bn to utility companies (nationally, the number is $22bn) and some cities are warning about electricity shut-offs if bills aren’t paid.Businesses are beginning to adjust their own expectations for spending. Used cars have been outselling new ones in the US for some time. In late March, Apple announced plans to scale back output of its iPhone SE by 20 per cent, because the war in Ukraine and rising inflation were cutting into consumer spending around the world. It also slashed orders for AirPods earphones. Last week, Netflix announced that it lost more streaming customers than it signed up in the first quarter, the company’s first reverse in a decade. The streaming service’s 35 per cent share price dive following the announcement led the entire S&P down.The worry now is that anything people can cut back on — from eating out to summer holidays to new clothes, white goods, cars or gadgets — may take a hit if food, fuel and (in places like the US) housing costs remain high. While that’s already happened for the 60 per cent of Americans who live pay cheque to pay cheque, there are indications that richer people are becoming wary about excess spending, too. One recent poll found that over half of those making $100,000 or more were dining out less, and roughly a third were cutting back on driving, travel and monthly subscriptions.What might the domino effects be if lower consumer spending, rising costs for raw inputs and falling share prices collide with higher interest rates and corporations holding more debt than ever? Ulf Lindahl, the chief executive of Currency Research Associates, says investors would be wise to look at what happened in another period of declining income and production growth, between September 1937 and June 1938.Back then, after hitting a couple of peaks, equity prices plunged by 40 per cent in three months. It’s a period that economist Kenneth D Roose examined in detail in his 1954 book, The Economics of Recession and Revival. While the exact causes of the crash are difficult to tease out, wholesale prices had surged at a time when people were still very conscious of the Depression and increasingly nervous about geopolitics.All that collided with a reduction in the federal aid that had been doled out as part of the New Deal, just as central bankers had begun raising rates. The cost of capital for business rose, even as spending declined, and share prices collapsed.There are obviously disturbing similarities with today’s global economic and geopolitical picture. We also have wary consumers, higher wages in many places, soaring inflation in commodities globally, a war in Ukraine, and central bankers trying to stay ahead of it all. Real 10-year US Treasury yields are about to turn positive for the first time since the pandemic, giving consumers yet another reason to save more, and spend less. It will also make corporate debt more expensive, and companies more vulnerable. Does all this mean that we are heading for a 40 per cent market correction? I’m betting not, if only because a China still pursuing a zero-Covid policy and a Europe in crisis means that US equities will benefit, at least for the time being, from being the cleanest dirty shirt in the closet. In our deglobalising era, it is, like it or not, safer to invest in a region that has its own food, fuel and consumer demand.That said, it does feel as if we are approaching a major turning point in the markets. Supply chains are shifting, conflict is growing and currency systems are changing. All of this is happening at a time when monetary policy is about to cross a Rubicon with rate hikes and quantitative tightening. History rhymes. Let’s hope it doesn’t repeat. [email protected] More

The writer is chief economist at German bank LBBWAs inflation rises in the eurozone, the pressure is inevitably building for the European Central Bank to step up planned monetary policy action.In March, European Central Bank president Christine Lagarde explained how the overdue normalisation of monetary policy was envisaged in Frankfurt: in the third quarter, bond purchases could be reduced to net zero with only maturing securities to be replaced. Only then would interest rates be raised “gradually”.The ECB is likely to be concerned that a more rapid normalisation of monetary policy, comparable with moves by the US Federal Reserve or the Bank of England, could entail risks to financial market stability. For this reason, it may prefer to move only cautiously, almost as if on eggshells.What seems to be the problem? A key concern appears to be Italy. Will the country be at risk of descending into a debt abyss if super-loose interest rates rise? The ECB may feel it has been wrongfooted once. Back in March 2020, Lagarde stated in one of her first press conferences that the ECB was not there to close government bond spreads. That is not wrong, of course. But her words had not yet faded away when a formidable sell-off of Italian government bonds began, worse than on any single day of the euro crisis. Lagarde had to row it all back immediately. But the ECB needs to leave the difficulties of that day behind. It should not stand in the way of tightening monetary conditions more courageously than it has hitherto communicated. The fear that Italy’s high debt load could pose a challenge to monetary normalisation cannot be dismissed out of hand. But Italy’s resilience has become much more solid than many doomsayers give it credit for.Last month’s announcement from Lagarde that the ECB would end its colossal bond purchases sooner than generally expected provoked a comparatively restrained reaction in Italian government bonds.For sure, it will not be without consequences if the ECB stops buying the equivalent of all new issues of euro government bonds, as has been the case for the past two years. Interest rates have already risen. Spreads are likely to widen further. But that is a healthy market response and should not be feared.Italy is in a better position than many observers believe: high inflation is reducing government debt. With inflation-driven nominal growth of 10 per cent, Italy’s debt ratio falls by 15 per cent of GDP in 2022, other things being equal. That helps. It helps even more that effective interest rates are very low. Italy pays an average interest rate on its outstanding debt that has declined to only 2 per cent, right at the ECB’s inflation target and well below inflation. Higher-yielding bonds issued a decade ago are still maturing and can be refinanced more cheaply today. The effective interest burden will therefore remain low or even fall for a few more years.Something else is both unusual and favourable. Italy currently has a stable and competent government that enjoys broad parliamentary support. This is by no means a matter of course in a country where the last “elected” prime minister, meaning the candidate heading the victorious party list, was one Silvio Berlusconi, almost fifteen years ago.Finally, Italy will have to issue less debt than many realise. The average life of Italy’s public debt is seven years, even if the Treasury has not taken advantage of the super low rates to extend its maturity profile. Only a small portion needs refinancing every year. And Rome busily pre-funded in the first quarter while the ECB’s €1.85tn “pandemic emergency purchase programme” of asset buying was still up and running. Rome’s borrowing needs will be further reduced through substantial budgetary relief from the Next Generation EU reconstruction fund. Between 2023 and 2025, Italy can expect annual grants of more than 1 per cent of its gross domestic product and a little more than that again through cheap EU loans. This makes it much more likely that prime minister Mario Draghi will be able to push through structural reforms to address Italy’s growth weakness than any of his predecessors, including Mario Monti, who had to run austere public finances.The risk of inflation getting out of control is rapidly rising. The ECB must shift up a gear. The worry that Italy cannot cope financially is unfounded. It can and it will. All the stars are aligned, and it won’t get any better than this. The longer Lagarde hesitates, the more likely it becomes that an Italian government crisis will get in the way. Then it would get truly tricky to increase rates. Don’t wait! More

We’ve been writing about the international monetary system for long enough to be somewhat dubious about oft-repeated claims of the dollar’s demise. Sure, we can see why the greenback ought to be dethroned. The US is no longer the economic power it once was, inflation’s at multi-decade highs, and now Washington has frozen hundreds of billions of dollars worth of assets held by regimes it doesn’t like. But history tells us that global reserve currency status tends to work like Teflon in reverse — it’s really hard for all of that exorbitant privilege to come unstuck. Our faith in the dollar is only bolstered when we come across nuggets such as this:

That particular piece of evidence comes courtesy of Central Banking’s latest annual poll of official sector reserve managers — that is, the people responsible for investing the rainy-day stockpiles built up by central banks across the world.The poll of 82 reserve managers, who together manage reserves worth a whopping $7.3tn — or 48 per cent of the world’s total — was conducted between February and mid-March. So some of the respondents might have reassessed their answer following the decision to put about $300bn-worth of the Russian central bank’s assets on ice due to Moscow’s invasion of Ukraine. But frankly we doubt there’s been too much of a reassessment among this crowd. For large, conservative investors such as these, there is simply no real alternative. As this respondent to the poll noted: It’s not about absolute security. It’s about the relations between selected currencies. And measured by relative value, USD is still the largest economy in terms of taxes generation, it is the most technological economy (the largest global technology companies are from the US), it has the biggest financial market, the most transparent regulation and the longest tradition. That’s not to say that there hasn’t been interest in other currencies too — over half of the survey respondents invest in the Australian and Canadian dollars, and in the renminbi. Interest in alternatives is on the up too:Compared with last year’s survey, the numbers investing in Australian and Canadian dollars increased marginally, but the increase for renminbi is significant — 41 in 2022 compared to 33 in 2021. Indeed, the onshore renminbi is poised to win more converts, with 14% of respondents saying they are considering investing now. Interestingly, the number of respondents investing in the offshore renminbi is lower than the 2021 figure of 22…. . . Viewed regionally, reserve managers from African central banks are notable for investing in the renminbi (both on- and offshore), and real at above sample percentages, as well as the South African rand. Reserve managers from the Americas favour Scandinavian currencies as well as the Singapore dollar and Korean won. The won is popular among reserve managers from Asia: one- third of the sample invest in this currency, compared to 19% in the survey. Just over 70% of reserve managers invest in the Australian dollar and nearly half in the New Zealand dollar, both considerably higher than the survey. There was considerable support for the Singapore dollar too. But, in terms of the big picture, these efforts at diversification are piecemeal. As the IMF’s quarterly summation of the currency composition of the official sector’s assets repeatedly show: Of course, at some point this will all change. No reserve currency remains on top forever. But, if central bank reserve managers have anything to do with it, the dollar’s going nowhere anytime soon. More