In Colombia, international investors buying stocks and bonds must leave a 40 percent deposit at Banco de la Republica for six months. The Reserve Bank of India created a bureaucratic thicket to curb speculation by foreign money managers. The Bank of Korea is investigating trading of currency forward contracts to limit gains in the won, now at a 10-year high.This isn't going to work, and will make the eventual dollar collapse worse.
Instead of using currency reserves or interest rates to influence foreign exchange markets, central banks and finance ministries are setting up obstacles to keep the falling dollar from threatening company profits and economic growth. The U.S. currency slumped 10 percent this year against its biggest trading partners, the steepest decline since 2003, while Treasury Secretary Henry Paulson has reiterated that the U.S. supports a "strong" dollar.
11 November 2007
Foreign Central Banks Instituting Currency Controls to Prop Up Dollar
Just so you knoow, this is a pretty good indicator that the dollar's "Wile E. Coyote" moment will be sooner rather than later. So the fact that the central banks of India, Korea, and Columbia have implemented measures to keep the the dollar from tanking is not a good sign.
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