Global Central Banks Dumping U.S. Dollars

Tuesday, October 13, 2009 4:29 PM

By: Dan Weil

For months, governments around the world have threatened to diversify their currency reserves away from the dollar.

Now, they are putting their money where their mouths are.

Central banks increased their foreign currency holdings by $413 billion, or 6 percent, last quarter.

That was the biggest rise in at least six years, according to Bloomberg News.

And for the countries that reveal how they allocate that money, 63 percent of the fresh cash went into yen and euros during the second quarter, soaring from 37 percent 10 years ago, according to Barclays Capital.

“Global central banks are getting more serious about diversification, whereas in the past they used to just talk about it,â€