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US dollar may plunge 20-30%

15 January 2009 15:48 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. The US dollar may plunge 20-30% within one or two years, says Alex Allen, chief investment officer of Eddington Capital Management.
According to him, the growth of US debt undermines the confidence in the dollar and jeopardizes its global reserve currency status.
"After all, if investors do not trust the currency, its value can be changed only in one direction, and I think that this is happening to the dollar,â€ he added.
Public debt now stands at U.S. $ 11 trillion and could rise by $2-3 trillion in 2009.
He is concerned about a change in Chinaâ€™s position which bought US $1 trillion government bonds.
However, since China is developing a stimulus package for its own economy, it could reduce the purchase of the US government debts and might sell part of U.S. government bonds it holds.