US dollar stays strong, official report

Washington, Nov 29 (UNI) The US dollar continues to be viewed as a highly reliable legal tender and counterfeiting of US currency remains low, according to a US report.

''People all over the world look to American currency for safety and security,'' US Treasurer Anna Escobedo Cabral said in a press statement that accompanied the report, published jointly by the US Board of Governors of the Federal Reserve System, the US Secret Service and the Department of the Treasury.

''I am pleased to learn that while counterfeiters may try to undermine the integrity of our money, American vigilance has upheld its reliability,'' she said.

The study attributes the success to intensive data gathering and law enforcement, regular redesigning of American banknotes and worldwide educational programs. As a result, only about one in 10,000 bills is counterfeited.

Of the 760 billion dollars in circulation as of December 2005, some 450 billion dollars, or approximately 60 per cent, was held abroad. International demand for US currency and its near-universal acceptance as a form of payment is a direct result of its reliability and stability, the report points out.

''US dollars are often found in countries with volatile political and economic conditions,'' says the report, and usually remain in circulation long after the conditions become more settled.

It says foreign-held dollars are used mostly to preserve value -- to hedge assets against inflation of local currencies.

They are also a popular means of exchange in cross-border trade when credit markets and financial institutions are underdeveloped or unreliable, and in informal, or gray, sectors of economy.

Due to their easy convertibility, they also are a currency of choice for international travelers. Unfortunately, it points out, the same factors that make US currency so popular also make it a prime counterfeiting target. Counterfeit dollar notes are easy to move around and "pass" into circulation in all parts of the world, and their manufacture presents a lucrative and often low-risk source of illegal profit.

In some countries, there are few or no legal procedures in place to help detect and investigate counterfeiting schemes.

An increasingly popular counterfeiting technology is digital printing that uses computer scanners and high-resolution printers.

A separate category comprises "supernotes" produced on professional money-printing presses that use technologies similar to those of the US Bureau of Engraving and Printing and are the top of the line.

Despite their generally high quality, the report says, they are regularly detected at the US Federal Reserve Bank cash offices and in financial institutions worldwide.

The report says that despite the growing availability of counterfeiting technologies, a relatively small amount of counterfeit currency (about 61 million dollars) was passed on to the public worldwide in 2005.

According to the report, the Latin America region and the region on Russia's southern border, as well as the countries of Colombia and North Korea, deserve special mention as sources of counterfeit US currency.

In the last four years, Colombia topped the list of countries where the largest amounts of counterfeit US notes were seized.

UNI XC SBA BST0605