US dollar share of global foreign exchange reserves fell to lowest level since 2013

Aurel Constantin 30/09/2019 | 19:26

The share of the US dollar in world foreign exchange reserves declared to the International Monetary Fund (IMF) fell in the second quarter to the lowest level at the end of 2013, while the Japanese yen’s share rose to the highest level in the last two decades, according to FMI data cited by Reuters.

Reserves held in US dollars in the second quarter of this year amounted to USD 6,790 billion, or 61.63 percent of the allocated reserves, compared with USD 6,740 billion, or 61.86 percent, in the first quarter. This is the lowest share of the US dollar in global foreign exchange reserves after the last quarter of 2013, when it stood at 61.27 percent.

The IMF emphasized that total allocated reserves increased to USD 11,020 billion in the second quarter, from USD 10,900 billion in the first quarter of this year. Global reserves are the assets of central banks held in various currencies, mainly used to support their liabilities. Central banks sometimes use their reserves to support national currencies.

While the share of the US dollar in global currency reserves has declined, the shares of the euro, the Japanese yen and the Chinese yuan have increased in the second quarter of this year compared to the first quarter.

The US dollar remains the world’s dominant reserve currency, but central banks around the world continue to diversify their reserves beyond dollars. Thus, the share of the Japanese yen in global foreign exchange reserves rose to 5.41 percent in the second quarter, the highest level recorded after the first quarter of 2001. Also, the share of the Chinese yuan increased from 1.95 percent in the first quarter to to 1.97 percent in the second quarter, this being the highest level since the IMF began to publish data on the weight of the Chinese currency in global foreign exchange reserves, in the last quarter of 2016. The weight of the euro increased in the second quarter to 20.35 percent, from 20.23 percent in the first quarter.

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