Bank for International Settlements, Survey of Foreign Exchange Market Activity (Basle: Bank for International Settlements, February 1990).
Bank of England, “The Foreign Exchange Market in London,” Quarterly Bulletin Vol. 32, No. 4 (London: Bank of England, November 1992), pp. 408–417.
Black, Stanley, (1989a) “Transactions Costs and Vehicle Currencies,” International Monetary Fund Working Paper WP/89/96, November 1989.
Frankel, Jeffrey A., “Still the Lingua Franca: The Exaggerated Death of the Dollar,” Foreign Affairs, Vol. 74, No. 4 (July/August 1995), pp. 9–16.
Kamin, Steven B., and Neil R. Ericsson, “Dollarization in Argentina,” International Finance Discussion Paper, No. 460, Board of Governors of the Federal Reserve System, November 1993.
Kenen, Peter B., “The Role of the U.S. Dollar as Unit of Account and Means of Payment in International Trade,” International Finance Section Research Memorandum, Princeton University, 1981.
Kenen, Peter B., “The Role of the U.S. Dollar as Store of Value in International Financial Markets,” International Finance Section Research Memorandum, Princeton University, 1982a.
Kenen, Peter B., “The Role of the U.S. Dollar in Pegging Exchange Rates,” International Finance Section Research Memorandum, Princeton University, 1982b.
Kenen, Peter B., “The Role of the Dollar as an International Currency,” Group of Thirty Occasional Papers, No. 13 (New York: Group of Thirty, 1983).
Porter, Richard D., and Ruth A. Judson, “The Location of U.S. Currency: How Much is Abroad?” Unpublished Manuscript, Board of Governors of the Federal Reserve System, June 1995.
Tavlas, George S., “On the International Use of Currencies: The Case of the Deutsche Mark,” International Monetary Fund Working Paper WP/90/3, January 1990.
Tavlas, George S., The Internationalization of Currencies: An Appraisal of the Japanese Yen, (Washington: IMF Occasional Paper No. 90, January 1992).
Prepared by S. Erik Oppers.
No data on cross-currency trades in New York are available for 1986.
In this report, the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. It also covers some territorial entities that are not states, but for which economic policies are formulated and statistical data are maintained on a separate and independent basis.
Taiwan Province of China--with a $93 billion stock of international reserves, the second biggest reserve holder in the world--reportedly has reduced its holdings of dollars by about 4 percentage points in each of the last several years to about 57 percent of its total reserve holdings by the end of 1994, and by another 3 percentage points by March 1995. See Frankel (1995).
See Financial Times (May 10, 1995).
Black (1989b) defines seigniorage as the difference between the rate of interest and the cost of providing a currency. In other words, the U.S. Government earns seigniorage on dollar notes and coins because it gets use of those funds without having to pay interest. For example, by bringing a $10 bill in circulation the Government can sell an equal amount less in interest-bearing debt, saving a yearly flow of interest payments on $10. This suggests an alternative way to estimate the yearly flow of seigniorage from the rest of the world to the United States. This flow is equal to the interest payments that non-U.S. residents are willing to give up in return for the monetary services that their stock of dollar cash provides.