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Global Reserves Crawl Towards Emerging Market Currencies

Since 2003, global reserves have more than doubled. There has been a gradual shift from U.S. dollars to euros over this time period; however, U.S. dollars still dominate in proportion at greater than 60% of total world reserves. In addition, emerging markets’ accumulation of reserves has outpaced advanced economies. Exports have contributed to emerging markets’ massive current account surpluses. In addition, capital inflows in emerging markets will magnify due to economic growth and interest rate differentials between Western and emerging market economies.

With massive amounts of reserves, currency diversification will be inevitable, but at a snail’s pace.

The good news is that during the global financial crisis, the magnitude of the devastation was partially mitigated by the growth of emerging market reserves playing a greater role in the world economy. Once recovery in the United States takes a stronger hold, the U.S. savings rate decline will continue that will restore the process of global imbalances. As long as the U.S. dollar remains the world’s reserve currency and continues wear the badge of being a safe-haven country, the United States will be able to finance large current account deficits.

Turkey Wealth Fund Corrals Investors Toward Domestic Projects

The Turkey Wealth Fund is continuing talks with other global asset owners and financial institutions to lure capital toward projects and assets within the country. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Ardian Auctions Off €1 Billion in Infrastructure Assets to APG

French private equity giant Ardian has auctioned off an undisclosed stake in a portfolio of European infrastructure assets valued at €1 billion to Dutch asset owner manager APG Investments. APG, which first invested in the portfolio in 2006, plans on buying out partnership interests in the portfolio held by other investors. French multinational insurance firm AXA SA will retain its stake as a co-owner of the portfolio alongside APG, with Ardian staying on as asset manager and advisor. The transaction remains subject to regulatory approval.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Tribal Council Approves Cherokee Nation Sovereign Wealth Fund Act

Tahlequah, Oklahoma-based Cherokee Nation Tribal Council approved the creation of the Cherokee Nation Sovereign Wealth Fund Act to establish a fund to ensure the continuation of tribal operations and the general welfare of tribal citizens.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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