The shift from sterling to the dollar 1965-76: evidence from Australia and New Zealand

Singleton, J. and Schenk, C. R. (2015) The shift from sterling to the dollar 1965-76: evidence from Australia and New Zealand. Economic History Review, 68(4), pp. 1154-1176. (doi:10.1111/ehr.12060)

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The management of foreign exchange reserves has recently attracted attention from both policy-makers and historians. Historical research has focussed on the nineteenth century and the interwar period, with less attention to the strategies of smaller countries in the final transition from sterling to the dollar in the post-1945 period. This article examines the evolution of reserve currency policy from the perspective of Australia and New Zealand in the 1960s and early 1970s. As in the 1930s, economic uncertainty and a shift in global economic power prompted changes in reserves strategy. Patterns of trade and debt and falling confidence in British economic policy prompted a move away from sterling, but the timing and extent of this transition were affected by the fragility of the sterling exchange rate, lack of alternative assets, and continued dependence on the London capital market. The choices for Australia and New Zealand were thus constrained, but they were able to leverage their position as holders of sterling to engage in agreements that provided an exchange rate guarantee for their sterling holdings and continued access to the London capital market. This mitigated the effect of the final global transition from sterling to the dollar while protecting their interests.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Schenk, Professor Catherine
Authors: Singleton, J., and Schenk, C. R.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Economic History Review
Publisher:Wiley-Blackwell on behalf of the Economic History Society
ISSN (Online):1468-0289
Copyright Holders:Copyright © 2015 The Authors
First Published:First published in Economic History Review 68(4):115401176
Publisher Policy:Reproduced under a Creative Commons License

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Project CodeAward NoProject NamePrincipal InvestigatorFunder's NameFunder RefLead Dept
524121The development of international financial regulation and supervision 1961-1982Catherine SchenkEconomic & Social Research Council (ESRC)ES/H026029/1SPS - ECONOMIC & SOCIAL HISTORY