Strategist says central banks may sell dollars

Central banks are likely to sell dollars in 2006 as they move to diversify their reserves in favour of the euro, according to BNP Paribas SA.

According to figures quoted by Bloomberg News, BNP estimates reserve managers will sell as much as $660 billion of U.S. assets in the next three years as they attempt to reduce their share of dollars to 50 percent from about 65 percent today.

``Even a small reallocation amongst central banks could have a very negative impact on the dollar,'' Ian Stannard, a

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Geoeconomic reserve management

The world order is evolving. Whether, and how, the international economy remains integrated or shifts into spheres of influence has consequences for central bank policy and reserve management.

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