The Italian Almanac

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an old photo of Bank of Italy central building

Italian News - August 3

Italy's central bank has switched a quarter of its reserves into the British pound and slashed holdings of the U.S. dollar, the Bank of Italy showed in its half-year report. The central bank said it had cut the share of its dollar reserves to 63 percent from 84 percent and also trimmed reserves in the Japanese yen, while holdings of sterling rose to 25 percent from zero in 2004. At the end of the first half of 2006 the value of official reserves was equal to 61.2 billion euros ($79 billion).

Worries about central banks diversifying their reserves away from the dollar have dogged the U.S. currency in the past few years, especially as Asian central banks built up massive stockpiles, mainly by buying dollars to prevent their domestic currencies from strengthening.

Countries such as the United Arab Emirates and Russia have said they are shifting out of dollars and into other currencies like the euro.