Dollar's share of forex reserves near low: IMF

WASHINGTON: The International Monetary Fund said on Thursday that the US dollar's share of official foreign-exchange reserves in most member nations ended last year at a near-record low. The IMF, in a quarterly report on forex reserves that notably excludes China, which has the world's largest reserves, said that 61.4 percent of the reserves of member nations was in dollars on December 31. That was little changed from the 61.3 percent registered at the end of the third quarter, the lowest share since the end of 1995, when the IMF first began keeping a record. On December 31, 1995, the dollar comprised 59.0 percent of reserves, before jumping to 62.0 a year later and reaching 71.5 percent at the end of 2001, on the eve of the launch of euro notes and coins.

The new report covers the foreign reserves of 138 IMF members, who hold 55 percent of the $9.26 trillion in reserves held across the world. China, by far the largest holder of US Treasury bonds, refuses to report the currencies held in its $2.85 trillion of reserves. But, in evidence of the dollar's slight decline in importance over the period, "other currencies" in the report jumped to a 4.4 percent share of total reserves, up from 4.0 percent on September 30. The euro's share slipped to 26.3 percent from 26.9 percent, while the pound and the Swiss franc remained stable, at 4.0 percent and 0.1 percent, respectively. The yen rose to 3.8 percent from 3.6 percent. The fourth quarter data "supports the notion that central banks are sticking to relatively stable allocations of major currencies (the dollar and euro) rather than pursuing aggressive diversification strategies," Nomura Global FX Research analysts said in a client note.

"Furthermore, the data suggest renewed demand for 'other' currencies and the yen," they added. The IMF publishes the figures in dollars. Any depreciation against the dollar automatically reduces the US currency's share in reserves, and inversely any appreciation increases it. The IMF noted that by the end of the fourth quarter, the euro had lost 2.0 percent of its value against the dollar, while the yen gained 2.4 percent.