Exclusive outtakes from industry leaders
Hiroshi Watanabe, president of the Japan Bank for International Cooperation, saw his share of dollar buying intervention during decades at the nation’s finance ministry. But the market veteran says despite prevalent talk recently, a shift away from the greenback as the world’s reserve currency may be great in theory, but like the language of Esperanto short on daily practitioners.
“Esperanto is a very good language, but no community uses it in its daily life, ” Watanabe told the Reuters Japan Investment Summit.
“That’s the same situation that applies to the currency… I don’t see any other currency that can take the position to replace the key U.S. dollar.”
China, Russia and Brazil intend to push at this week’s Group of Eight summit for a new global reserve currency as an alternative to the dollar.
Soaring oil prices have helped make Russia rich, but the flood of petrodollars means Russians face double digit price inflation. Dmitry Pankin, Russia’s deputy finance minister, sees a trade off in a recent market selloff: Russian companies might have trouble raising capital, but billions of dollars in capital outflows may be just the thing to help cool inflation.