U.S. dollar share of FX reserves slips, "other currencies" rise-IMF

04/01/2013

NEW YORK, April 1 (Reuters) - The U.S. dollar's share of known reserves held by global central banks edged lower as of the fourth quarter last year, International Monetary Fund data showed on Monday. The greenback's share of the roughly $6.0 trillion of known reserves was 61.9 percent, slightly lower than the 62.1 percent posted the previous quarter. The euro's share, meanwhile, held steady at 23.9 percent. Shaun Osborne, chief currency strategist at TD Securities in Toronto, said the dollar's share was about 10 percentage points lower than the share held 10 years ago, although recent trends suggested that its decline may be stabilizing. "It is the euro's proportion of global reserve assets that is clearly easing at present," said Osborne. Since 2009, the euro's share of global allocated reserve assets has declined as the ongoing euro zone sovereign and economic crisis unfolded. Its share has dropped from a little under 28 percent in 2009 to just under 24 percent. The current holdings were close to the lowest overall since late 2004. One noteworthy trend was the continued rise in the category called "other currencies," which mainly means commodity-linked currencies, such as the Australian and Canadian dollars. Their share of overall currency reserves grew to 6.1 percent in the fourth quarter from 5.7 percent the previous quarter and 5.2 percent from the same quarter last year. On a year-over-year basis, central banks' holdings of "other currencies" jumped 25 percent. Unallocated reserves, or those not known and believed mostly held by China, rose to $4.9 trillion in the fourth quarter from $4.7 trillion in the third. Total global reserves, meanwhile, rose to a record near $11 trillion, or a 7.2 percent year-over, data showed. Global reserves are assets of central banks held in different currencies primarily used to back their liabilities. Central banks have sometimes cooperated in buying and selling official international reserves in order to influence exchange rates.

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