Asian Banks Offload Their Greenbacks

The US dollar's status as the world's main reserve currency is under threat as Asian banks back away from the superpower's ballooning twin deficits.Over the past three years, central banks in the region have been scaling back their holdings of US dollars amid jitters about the United States' ever-expanding current account and budget deficits, which collectively soaked up at least $US1000 billion ($A1265 billion) of foreign currency last year.

A report by the Bank for International Settlements has estimated that the share of deposits held in US currency by Asian banks dropped to 67 per cent in the September quarter of 2004, from about 81 per cent of total deposits three years earlier.The figures suggest that a dramatic but not widely publicised regional shift away from the US dollar is under way.