For years, they bankrolled the US deficit but now Asian central bankers are more likely to be buying their own currencies than swallowing up US Treasuries.

Asian central banks’ foreign exchange reserves shrank by $120bn in October, a fivefold increase on the September fall. There are several reasons for the depleted kitties. Valuation effects lop off some of the headline number: about 60-65 per cent of Asian reserves are believed to be in dollars but maybe a fifth are in depreciating euros. Balance of payments positions are generally deteriorating. Some central banks are also dipping into reserves to defend the currency – Korea, for one. In addition, there is further dollar dumping as banks unwind forward purchases of dollars that they undertook in recent years as part of mercantilist policies to keep home currencies weak. These sales total perhaps another $120bn.