Global Foreign Exchange Reserves Reach $12.7 Trillion... Dollar Share at 59%, Lowest Since 1995

[Image source= AFP Yonhap News]

[Asia Economy Reporter Park Byung-hee] The share of the US dollar in global foreign exchange reserves has fallen to its lowest level since 1995.

According to data from the International Monetary Fund (IMF), as of the end of the fourth quarter last year, the US dollar accounted for 59% of global foreign exchange reserves. This is the lowest figure since 58% in 1995. The dollar's share has declined for three consecutive quarters. At the end of the third quarter last year, the share was 60.5%.

The decrease in the dollar's share indicates a weakening of the dollar's status as the key currency. Considering the serious debt situation in the United States, analysts say the dollar's status is inevitably weakening.

Edward Moya, Senior Analyst at online forex trading firm OANDA, explained, "Most expect the dollar to show weakness going forward. Looking at the increase in dollar liquidity due to President Joe Biden's stimulus package, the dollar is bound to weaken. The large trade deficit will continue, and the long-term outlook for the dollar is bearish."

In fact, the share of the dollar in foreign exchange reserves has been declining over the long term. Twenty years ago, in 2001, the dollar's share was close to 73%.

The dollar has also shown significant volatility recently. In the fourth quarter last year, the dollar's value fell by 4%, marking the largest depreciation since the second quarter of 2017. However, in the first quarter of this year, it appreciated by 3.5%, the largest gain since the second quarter of 2018.

At the end of the fourth quarter last year, the euro's share was 21.2%, up 0.7 percentage points from the third quarter. The euro's share was highest in 2009, reaching 28% at that time.

The yen's share increased for three consecutive quarters, reaching 6.03%. The yuan's share, which the IMF began tracking in 2017, rose for four consecutive quarters to 2.25%.

As of the end of the fourth quarter last year, global foreign exchange reserves were valued at $12.7 trillion, up $454 billion from $12.246 trillion in the third quarter.

Although the size of dollar foreign exchange reserves increased from $6.939 trillion at the end of the third quarter last year to $7 trillion at the end of the fourth quarter, the increase was not large enough, so its share actually decreased.

This content was produced with the assistance of AI translation services.