The Federal Reserve should keep the basic value of the dollar steady rather than worry about the level of the stock market or fret about the length or strength of the economic expansion.
But Dino Kos, a former chief of markets at the Federal Reserve Bank of New York who now works for Portales Partners, a research firm, notes that the yuan does not meet one of the most basic requirements of a reserve currency: other countries cannot use it to intervene in foreign-exchange markets because it is not freely convertible.
With both mineral and tobacco exports falling far short of expectations, the Reserve Bank was forced to dole out half of its meagre reserves to meet basic import needs.