At the World Bank/IMF meetings in October, a number of Asian central bank governors expressed a reluctance to change tack. The governor of State Bank of Pakistan, Dr Ishrat Husain, said that the need for liquidity and safety made investing central bank reserves in US treasuries a rational decision.
Li Ruogu, the affable deputy governor of The People’s Bank of China, said: “Liquidity is first, safety is second and only third comes profits.” He said that China would start buying euro assets as well as dollar assets at some stage but currently “the euro is too expensive, our trade is denominated in dollars and we can’t make sudden shifts”.
