How and where to reserve savings against fall of the usd?

Politics Materials 1 April 2008 12:05 (UTC +04:00)

Everybody looks after keeping and increasing own savings: Government at State level and ordinary citizens within their opportunities. In what currency to keep them, without danger of fall of rate? It is a delicate issue because any wrong decision may bring to financial losses. Therefore, today it is interesting for the Azerbaijani readers how other countries and peoples keep their savings, what currencies they give preference.


Irrespective of immediate fall of the USD rate, main banking reserves of not only State, but also ordinary people in Israel are being kept only in this currency. The cost of the real estate is assessed at the USD although the real account is devised at shekel. It seems that the Israeli citizens do not pay special attention to several recently adopted laws limiting application of the USD as currency equivalent. Today those who reside in removable apartments or took solid loans are happy because leasing amount and the debts are paid off with shekel, but initially they are accounted in accordance with the USD rate. The cheap USD presents serious problems for the Israeli economy which is subject to the export. The country receives main revenues from the foreign trade. Israel sells high-technologies and agricultural products to the European and American markets. The matter is that the Israeli export gradually increases to the Asian and South American markets and the account currency is the USD there.

It means that it is impossible to avoid the USD. Only within the country the exporters make accounts in expensive shekel, but receive the profits with cheap USD. The local experts stated that even if the USD further upholds its low rate, the revenues of the Israeli exporting companies will decrease at least by $1bln. As seen, the scenario of the situation in Israel is similar with Azerbaijan.

Georgia Everybody in Georgia has a habit to account with the USD because the American currency is considered as own. The main payments within the country are made with lari (currency of Georgia). In addition, the salaries in the Country are determined in the national currency, but not in the USD as previous. However, many people still highlight the USD while speaking about the prices. Possibly it is linked with the issue that irrespective of the USD fall, key part of the Country's population continues to use the USD as key currency for savings. Large amount of the savings are kept not in the banks, but at homes in cash bonds.

According to the information provided by the National Bank of Georgia, nearly 70% of the Country's currency reserves are kept in the USD and other part - in Euro. The Georgian currency reserves have been placed in the deposits in the high category banks of the USA and Europe, as well as in various securities.


For this period, the USD rate in relevant to grivna in Ukraine did not change significantly. However, due to the worldwide uncertainty for the future of the USD, the Ukrainians still think, but is not better to keep the savings in the national currency. The patriots of the grivna publicly pursue policy. From the TV channels and newspaper pages, they try to convince the citizens: time has come to move the monies from homes banks to more reliable banks. The bankers confirm that the personal example of the rich Ukrainians, as well as mass of the cheap literature on the financial literacy campaign already functions. Each year many people bring their dollars from home to keep in the deposits.

With regards to the short-term credits, the grivna prevail there. Nevertheless, people give preference to the foreign currency in taking large purchases large car or real estate. In addition, the USD makes up significant part of the savings of the population. With regards to the salaries, officially they are paid off in grivna. Only in the markets - food and thing, it is possible to make payments with dollar banknotes. Payment is not made with currency in restaurants, stores.

The information on the share of the USD in the gold and currency reserves is secret, which is not disclosed by the National Bank of Ukraine. However, according to the statistics of the payments, the dollarization of Ukraine's economy seems to be as: USD - 72.5%, Euro - 19.4%, Russian ruble - 6.5%.


The authoritative financers in the USA demonstrate similar position with regards to their currency. This, Bill Gross, an experienced banker and Managing Director of a large investment bank, stated that the transition from the USD to other currency should be one of the first tasks for everybody being engaged in investments. Investor Warren Buffet is also sure that the trust in the American currency decreases. The financer Jim Rogers, former partner of George Soros, intends to purchase yuan.