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Business News/ Opinion / Online-views/  Morgan Stanley Asia chief bats for the dollar
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Morgan Stanley Asia chief bats for the dollar

Morgan Stanley Asia chief bats for the dollar

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Beijing: Stephen Roach, Morgan Stanley Asia Ltd’s chairman, said the US dollar will retain its status as the world currency for the next 15-20 years.

Roach was speaking at an interview on Thursday at the International Finance Forum in Beijing. “There’s no way the yuan can even approach the dollar’s status as the world currency. The dollar’s status is very much intact," he said.

Roach is not overtly worried about the declining strength of the dollar. “It’s a mistaken idea for people to think that a reserve currency can’t often move up and down," he said. “The dumping of US dollars has more to do with investors’ concerns about the state of the US current account deficit and less to do with people’s confidence in the currency. People aren’t losing confidence in the dollar as the world currency."

“The yen, the euro, the sterling, the Swiss franc will take on greater roles but these still don’t come close to commanding the kind of security that the US dollar does in investors’ minds. It will take 15-20 years for these currencies to take on the dollar’s status," he said.

Roach said dollar-denominated assets around the world are well in excess of America’s share in the world GDP. “Over time, we can expect a realignment of this," he added. “It’s true that central banks around the world will hold more yuan-denominated assets over time."

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Published: 08 Nov 2007, 11:31 PM IST
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