Some current euro members Greece (and perhaps others) would revert to national currencies.

And floating and fixed exchange rate regimes coexist uneasily, because volatility tends to affect the floating currencies (often the euro, and recently the Latin American currencies).

Budgeting for non euro expenditures

And that will require a less competitive euro higher relative to the dollar and other currencies.

Japanese intervention cannot explain the revaluation of the euro against the dollar and many other currencies.

Table 5 Non convertible currencies held at 31 December 2004

The dollar is likely to continue falling relative to the euro and other currencies over the next several years.

The only way to avoid it would be for them to exit the euro and devalue their new currencies.

The really large currencies the dollar, the euro, and the yen were never managed explicitly or solely on this principle.

Yet the rise in the euro, yen, and other currencies compensated for the fall in the dollar, preserving China s advantage.

As a consequence, the euro is rising not only against the US dollar, but also against Asian currencies, whose central banks intervene in foreign exchange markets to fix their currencies value against the dollar.

Today, the misalignment of the dollar and the euro against the renminbi and other Asian currencies is increasingly becoming Asia s problem.

The regular resources cash balance at the end of 2004 was 329 million, consisting of 318 million in convertible currencies and 11 million in non convertible currencies.

The equivalent of 1,491,424 ( 1,099,180) is held in currencies classified as non convertible, as follows

Moreover, it happened without much downward exchange rate adjustment so far, owing to the weakness of the euro and some other key currencies.

FLORENCE Fears about sovereign debt and doubts about the euro rescue package have pushed the question of international reserve currencies to the fore.

The balance sheet effects on euro debts caused by the depreciation of the new national currency would thus have to be handled through an orderly and negotiated conversion of euro liabilities into the new national currencies.

While oil exporting countries receive revenues in dollars (or their euro equivalent), they use different currencies to import goods and services from various countries.

This has also shifted the burden of adjustment disproportionately onto countries with floating currencies, such as the euro and the Canadian and Australian dollar.

The minimum euro value per item of non expendable property is 1,500.

Ten years ago, there were real concerns about launching the new currency. Would people give up their old national currencies and use the new euro?

There was no realistic alternative, I concluded, to a future in which the leading national currencies, the dollar and the euro, still dominated international transactions.

After all, we live in a global system in which different countries use different currencies, which implies that residents and non residents have asymmetric demands for assets issued in those currencies.

First, interest rates are higher on euro and British bonds than on similar US securities, making investments in those currencies more rewarding than investments in dollars.

Europeans are wrong to be angry with China because its currency peg to the US dollar has boosted the euro against most currencies on foreign exchange markets.

The Chinese can reasonably worry about that after seeing the dollar fall 10 relative to the euro in the past year and substantially more against other currencies.

The dollar has declined during the past two years against not only the euro but also against most other currencies, including the Japanese yen and the renminbi.

The reason is obvious on a moment s reflection the combined share of the dollar and euro approaches 80 of the basket of currencies that comprise the SDR.

Table 5 shows details of the United States dollar equivalent of non convertible currencies held at 31 December 2004.

The franc fell 8.8 against the euro, 9.5 against the dollar, and at least 8.2 against all 16 of the most active currencies on the day of the announcement.

(a) Effective 1 January 2002, the euro should be used as the official currency for those emoluments which are currently set in the national currencies of the twelve euro zone countries, and that the national currency amounts would be converted by applying the respective fixed conversion rates and then rounded up or down to the nearest euro

Gains arising from the revaluation of non euro cash and bank amounts are treated as realized

In my recent book Exorbitant Privilege The Rise and Fall of the Dollar, I described a future in which the dollar and the euro would be the dominant global currencies.

The intellectual father of the euro, Columbia University s Robert Mundell, once famously opined that the optimal number of currencies in the world is an odd number, preferably less than three.

In my recent book Exorbitant Privilege The Rise and Fall of the Dollar, I described a future in which the dollar and the euro would be the dominant global currencies.

But the euro area as a whole nonetheless had a trade surplus of more than 30 billion over the past 12 months. And, with the euro down significantly relative to many other currencies over the past year, Europe s trade balance can increase further in the months ahead.

A single currency also means a common exchange rate relative to other currencies, which, for any country within the euro zone, precludes a natural market response to a chronic trade deficit.

Back then, pegging the renminbi to the dollar pushed down China s real effective exchange rate, because the dollar was losing value against other currencies, such as the euro, sterling, and yen.

(v) Gain loss on exchange arises from transactions conducted in currencies other than dollars (i.e. for the dollar based extrabudgetary technical cooperation activities in annex I, dollar statements) and the revaluation of assets and liabilities held in non dollar currencies.

Exchange of currencies

The euro is an ultra fixed currency among members participating countries locked themselves into an initial exchange rate vis à vis their pre existing currencies and then threw the keys into the long grass.

Ideally, Asian currencies would rise much more than 15 while European currencies would rise less.

Even if there were no increase in inflation rates, a sharp fall in the dollar s value relative to the euro and other foreign currencies would reduce its purchasing value in buying European and other products.

Once upon a time (less than a year ago), it was possible to imagine international reserve portfolios dominated by the dollar and euro today, anxious central bankers are desperate for alternatives to both sick currencies.

Moreover, some emerging market currencies are joining the club of international currencies for the first time.