EoW March 2010

Transat lant ic Cable

In brief . . . Eight years after the 9/11 terrorist attacks in New York, and ❈ despite several directives from Congress, the US still has no reliable system in place for verifying that visitors from overseas have left the country. The most recent available information, for 2008, indicates that 2.9 million visitors on temporary visas checked in but never o cially checked out by the end of the year. Over all, immigration authorities have said, about 40% of the estimated 11 million illegal immigrants in the US came on legitimate visas and overstayed. Since the attacks, immigration authorities, with more than $1 billion from Congress, have improved and expanded their systems for monitoring other nationals when they arrive. But no biometric inspection or systematic follow-up is in place to con rm their departure. Recently there have been renewed calls in Congress for the Department of Homeland Security to perfect and activate a universal electronic exit monitoring system. The Christmas Day 2009 terrorist attempt to blow up an airliner over Detroit is certain to intensify this pressure. Russia turns to the Canadian dollar in a bid to lower its dependence on the US greenback Russia’s central bank announced on 20 th January that it had started buying Canadian dollars and securities in a move to diversify its foreign exchange reserves. As noted by Peter Garnham in the Financial Times , analysts said the action could be a precursor of greater diversi cation of emerging-market central bank assets away from the American dollar and into investments denominated in other commodity-linked currencies, such as the Australian dollar. Ahead of the announcement, Russia’s foreign exchange reserves were roughly split between euros and American dollars, the world’s most widely held currency. (Speci cally, the reserves stood at 47% US dollars; 41% euros; 10% pounds sterling; and 2% yen.) Although the Bank of the Russian Federation did not specify how much of its reserves it was allocating to assets denominated in the Canadian dollar, analysts estimated that it could put up to 2%, or $9 billion, of its foreign exchange reserves into the currency. Writing in the Business Insider [22 nd January], Vincent Fernando observed that Russia’s “direct snub” to both the euro and the greenback could, if other central banks follow suit, be good news for Canada’s dollar. He noted uncon rmed reports by traders that other emerging-market central banks – including some in Asia that hold large foreign exchange reserves – had also been active in the foreign exchange market, buying both Canadian and Australian dollars. Monetary

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EuroWire – March 2010