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

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.

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.

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

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

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

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.

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

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.

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

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

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.

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.

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

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.

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.

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

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

Second, China s foreign assets are denominated almost exclusively in US dollars, while its foreign liabilities are denominated mostly in renminbi.

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.

With rebalancing will come a decline in China s surplus saving, much slower accumulation of foreign exchange reserves, and a concomitant reduction in its seemingly voracious demand for dollar denominated assets.

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. With US government debt repayment now in play, the very concept of dollar based riskless assets is in doubt.

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.

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.

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.

China's government regards the threat of capital losses on its dollar denominated securities as less important than the need to maintain near full employment in coastal manufacturing cities like Shanghai.

The principal risk I see today is that being borne by investors in dollar denominated debt and I don t believe they are charging a fair price for what they are doing.

The external deficit of the United States is financed mainly by Central Banks that invest their foreign exchange reserves in dollar assets, for which euro denominated assets represent a serious alternative.

Many developing countries have made progress since the 1990 s in shifting from dollar denominated debt toward foreign direct investment and other types of capital inflows, or in paying down their liabilities altogether.

Expenditures for staff costs and maintenance of the premises mainly denominated in euros have been translated into United States dollars in April 2002 at an average euro to dollar exchange rate of 0,8636.

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.

Other factors, however, helped to prevent further growth of the debt, such as the recent recovery of the dollar against other currencies, which reduced the dollar value of debt denominated in those currencies, and the various debt reduction mechanisms used in many countries of the region.

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.

European and other international banks had acquired a lot of dollar denominated assets which they habitually funded in the interbank market as the market dried up, they were forced to buy dollars.

quot a fair balance between the entitlement to a full United States dollar denominated benefit and the need to safeguard the purchasing power of the benefit in local currency terms quot . 16

b Total public debt denominated in pesos and foreign currency.

Changes shown in the fund balances of those accounts are due solely to the revaluation at current rates of exchange of the outstanding claims that are denominated in currencies other than the United States dollar.

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.

(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.

China has recycled about 60 of these reserves back into dollar denominated US government securities, because it wants to limit any appreciation of the renminbi against the world s benchmark currency.

Expenditure on consultants and experts is denominated in both euros and dollars.