WSJ says long-term effect of Brexit is GBP loss of reserve status

29 June 2016, 06:04
Sherif Hasan

Apparently there is this little rainy island off the coast of France, and its currency (big round stones with a hole in it) has 'reserve status'

Go figure ...

Well, says the Wall Street Journal, not for much longer:

  • US dollar, euro, yen, yuan and pound are the usual constituents of the International Monetary Fund's reserve currency basket
  • if the pound loses its status as a reserve currency, it's not just about Britain's international prestige. It could end up raising the cost of capital for local businesses as investors chose to hold less U.K. assets.
  • "As any particular economy's importance in international trade wanes, so does the willingness of the rest of the world to hold their currencies as a store of value," said Frank Gill, S&P senior director for sovereign ratings.

The article may be gated, link is here.

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