The Diplomat.
Australia has long prided itself on “punching above its weight” in global sporting contests such as the Olympics. Now, the resource-rich nation of 22.6 million people and the world’s 12th biggest economy may see its currency do the same, with the Australian dollar forecast to join the world’s elite.
Once derided as the “Pacific peso,” the Australian dollar may by 2015
become an official global reserve currency, adding to underlying demand
for a currency already considered overvalued by the nation’s exporters.
The International Monetary Fund reportedly plans to include the
“Aussie” as well as the Canadian dollar in next year’s COFER (Currency
Composition of Official Foreign Exchange Reserves) surveys, which currently consists of the U.S. dollar, Swiss franc, euro, pound sterling and Japanese yen.
The symbolic move is seen as the first step toward making the Aussie
part of the IMF’s Special Drawing Rights (SDRs), which are used by
central banks to calculate their obligations to the fund.
The bulk of global foreign exchange reserves
are held in the five COFER currencies, and with foreign governments
already holding an estimated A$60 billion worth of Australian dollars,
demand from central banks around the world would likely swell.
