Currency Repatriation

Last week's credit crunch has set off a worldwide rush for dollars as banks and fund managers scramble to pay back loans used to buy risky mortgage securities. They are competing with firms such as AXA Investment Managers, Investec Asset Management Ltd. and FX Concepts Inc., which are also buying dollars in a bet on further appreciation.

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If the US is repatriating money back into the USA from abroad, then that is reducing foreign holdings of dollars as a reserve currency.

For example, if the US brings in a millions of dollars from Europe, then that is a million dollars less that is being used as a reserve currency in Europe.