Central banks look beyond T-bills for diversification

Central banks are increasingly looking to diversify their portfolios beyond US Treasury bills amid a continuing rise in global reserves. However, the turmoil in credit markets has caused reserve managers to reconsider forays into non-traditional assets such as mortgage-backed securities.

Global foreign exchange reserves have more than trebled since 1995, rising from $1.39 trillion to approximately $6.03 trillion in the third quarter of 2007, according to International Monetary Fund. This is