If rich country central banks can buy long term bonds, then emerging country central banks can buy dollar denominated bonds.

In November 2001, the authorities again restructured the public debt, this time exchanging dollar denominated bonds for domestic guaranteed loans.

The yen s rising value raises the yield on Japanese bonds relative to the yield on bonds denominated in other currencies.

Back in the 1970 s, there was some limited issuance of SDR denominated liabilities by commercial banks and SDR denominated bonds by corporations.

If the dollar is likely to fall against the euro over the next several years, investments in euro denominated bonds issued by the German or French governments may provide higher safe returns.

If foreign holders of dollar bonds become concerned that the unsustainability of America s situation will lead to higher interest rates and a weaker dollar, they will want to sell dollar bonds.

Thus, while a significant proportion of expenditure is denominated in euros, some dollar expenditures remain.

As a result, holders of dollar denominated assets should be looking forward to two alternative scenarios.

In neither scenario does it make sense to hold huge amounts of dollar denominated assets today.

And that raises serious questions about the wisdom of China s massive investments in dollar denominated assets.

Inflation in the US or Europe would reduce the purchasing value of the dollar bonds or euro bonds.

The actual budget increase cannot be determined simply by noting a change in the dollar denominated amount.

8. During the fourth cycle, there was a strong growth in the dollar value of non dollar denominated voluntary contributions received, partly because of a weakening of the dollar during this period.

Therefore, foreign speculators should, any day now, dump their dollar denominated assets onto the market, and so bring about the dollar decline that they so fear.

The excess of saving over investment has given Japan a current account surplus, allowing the country to finance all of the government borrowing domestically, with enough left over to invest in dollar denominated bonds and other foreign securities.

That predictable dollar decline makes the relative return on holding dollar bonds even lower than the interest rate differential alone implies.

One might think that foreign investors would quake in terror at these terms and shy away from dollar denominated assets.

That will sharply reduce the pace of foreign exchange accumulation and cut into China s open ended demand for dollar denominated assets.

Lending by foreign banks has also shifted from largely dollar denominated cross border loans to local currency loans through local affiliates.

If they perceive that the dollar and dollar bonds have become riskier, they will want to change the distribution of assets in their portfolios.

For example, a German investor would consider United States bonds to have more currency risk than German bonds (since the dollar may go down relative to the euro) similarly, a United States investor would consider German bonds to have more currency risk than United States bonds (since the euro may go down relative to the dollar).

Investors in the US and other countries cannot buy either renminbi or renminbi denominated bonds in the way that they can buy other currencies.

They continue to hold very large positions in dollar denominated assets, which they would not do if they thought the US faced a choice between a cheap dollar and a deep depression.

By plowing more than two thirds of its mammoth foreign currency reserves into US dollar denominated assets, China has gained significant political leverage.

So, although dollar bonds and, increasingly, dollar equities are a large part of these countries sovereign wealth accounts, most of the dollar securities that they hold are not needed to finance trade imbalances.

Chinese bonds remain unavailable. Second tier currencies, like the Swiss franc, the Canadian dollar, and the Australian dollar, are only a slightly larger midget when combined.

For the first time ever, in 2004, the Inter American Development Bank issued bonds that are denominated in the currencies of the countries in the region.

With everyone else buying, selling, and holding dollars, it pays to do the same, since markets in dollar denominated assets will be the deepest.

In 1994, Mexico shook the global economy when the extent of its domestic (but dollar denominated) debt in the so called tessobonos became apparent.

Second, the costs of the insurance premium the outsize, largely dollar denominated reservoir of China s foreign exchange reserves have been magnified by political risk.

At the same time, periphery countries held a lot of dollar denominated obligations which they had to repay when they could not roll them over.

Japan, China, and other export oriented East Asian economies are indeed eager to keep the value of the dollar relatively high, and their central banks have piled up close to 2 trillion in dollar denominated assets.

If that feeling is widespread, the value of the dollar and the price of dollar bonds can both decline without any net change in the holding of these assets.

Yet the typical investor in dollar denominated assets whether a rich private individual, a pension fund, or a central bank has not taken the steps to protect themselves against the very likely dollar decline in our future.

Expanding local currency bond markets could expedite a shift from dollar denominated cross border loans to local currency loans, bringing benefits to both investors and borrowers.

But how? Buying other countries bonds would mean abandoning the goal of keeping real currency values low against the dollar.

No securities, no stocks, no bonds, nothing but a miserable little five hundred dollar equity in a life insurance policy.

Supported by a dollar denominated line of credit, the EPU s 15 Western European member states established exact dollar exchange rate parities as a prelude to anchoring their domestic price levels and removing all currency restrictions on intra European trade.

Additionally, miscellaneous income, which consists of interest income from investments and changes in the dollar value of non dollar denominated assets, was projected to average 33 million annually in the years of the fifth programming cycle. Status of resources

For example, WIPO's budget is denominated in Swiss francs and UNIDO's regular budget is denominated in euros.

The two main contractionary factors were the dollar apos s recent rise in international exchange markets, which reduced the dollar value of debt denominated in other currencies, and the various debt reduction schemes implemented in many countries of the region.

Because the current account surplus is denominated in foreign currencies, China must use these funds to invest abroad, primarily by purchasing government bonds issued by the United States and European countries.

As a result, China s dollar denominated foreign exchange reserves, which account for the largest share of all the foreign holdings of US government securities, will suffer interest rate losses.

While China has taken minor measures to slow the increase in its dollar denominated holdings, it has been unwilling to risk a fully convertible currency for domestic political reasons.

(b) During the biennium, investment managers Lombard Odier et Cie and Paribas Asset Management were appointed, making a total of seven managers for the United States dollar denominated Fund.