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63 percent of new foreign exchange reserves in the second quarter accounted for the euro and the yen - According to the recent Barclays Capital report. Can developing countries meet their threat to depart from the dollar? Global foreign exchange reserves, heavily depleted in the hottest phase of the crisis, in the second quarter once again began to grow. But being reborn in a modified form - an ever smaller share of them are in U.S. dollars, euro and increasing yen. Economists, however, are not sure whether this is the result of deliberate diversification of reserves by developing countries, or mainly due to the depreciation of the dollar. According to the latest IMF figures the value of global foreign exchange reserves (the largest holders are China, Japan, Russia and other countries exporting crude oil) reached for the second quarter in terms of U.S. currency 6.8 trillion, compared with 6.5 trillion in the end of the quarter. This was the first increase in the reserves from the second quarter of last year, when they reached a record level of nearly 7 billion USD. Since then, however, the financial crisis gained momentum, forcing central banks to huge expenses, including to maintain its currency exchange rate. The reversal of the dollar When the financial markets stabilized and the central banks joined to supplement reserves, sent his attention mainly to assets denominated in different units of payment than the dollar. As is clear from the report published yesterday at Barclays Capital, those countries which report to the IMF's state foreign exchange reserves with a detailed breakdown of the currency in the second quarter of 63 percent. new capital invested in euros and yen. This percentage has never been so high. As a result, the U.S. share of global currency reserves fell for the second quarter to its lowest ever level of 62.8 percent. compared with less than 65 percent. in the previous quarter. It was also the biggest drop in this index since mid-2002 when the share of dollar assets in global reserves fell by 2.5 percentage points. At the same time in the second quarter of this year, the euro share in global reserves has risen to 27.5 percent., With 25.9 percent. the previous three months. NBP also declined in recent years, part of the American currency in the foreign exchange reserves (see chart). No more threats - It seems that the developing countries to really move away from the dollar, instead of just talking about it - found Steven Englander, chief currency strategist Barclays. Established in this way to the many suggestions in recent months, China and other major U.S. creditors that you must cancel the dollar as the main reserve currency, such as because of the growing public debt in Washington, accompanied by a dangerously loose monetary policy. In early October there were rumors - immediately denied - that the Arab states want to settle the transactions in raw materials in a currency other than U.S. dollars. - The diversification of global foreign exchange reserves will accelerate - indicates Fabrizio Fiorini, managing the Italian investment firm Aletti Gestielle. Predictions close to the end of the U.S. currency as the main reserve currency, however, not all convinced. - Once again the U.S. will tighten monetary policy, the dollar once again return to favor - argues Christoph Kind, Managing Trust in Frankfurt. Other economists suggest that the decline of the dollar in global foreign exchange reserves is mainly lies its depreciation. In the second quarter of the U.S. currency weakened against the basket of six major currencies over 6 percent. Without taking into account exchange rate fluctuations, the percentage of dollar reserves in the second quarter of virtually no change. Moreover, the composition rate of almost 40 percent. global reserves is not known. Such information shall not disclose such China. Meanwhile, Beijing apparently did not leave the dollar: since the beginning of the value of U.S. bonds in his portfolio grew by 12 percent. Based on data for one quarter is difficult to assess whether it is really is a retreat from the dollar as global reserve currency. On the one hand, fluctuations in the second quarter were not so large as to explain the decline in the proportion of dollar assets in global foreign exchange reserves. This indicates that there have been real changes in the structure of the reserves. On the other hand, Federal Reserve data clearly show that foreign central banks continued to increase involvement in U.S. dollars. Even if these institutions are now more euros to buy, not accompanied by an escape from the dollar. The situation would be alarming only in the case, if the actual value of dollars held by such institutions began to decrease. Decline in the share of dollars in global foreign exchange reserves in the second quarter is part of a trend that we observe since a decade. In 2001, the share of U.S. currency in the reserves, after more than 70 percent. Although this issue has recently attracted much attention, that developing countries have long been willing to declare to diversify their reserves. It's not about moving away from the dollar towards the euro, but rather in the direction of such currencies as the Australian Dollar, Swedish Krona, etc. But this process did not accelerate. That the jump in the second quarter was strong, due to the fact that in the last three quarters of these countries have increased the share of dollars in their reserves. Now trying to return to pre-crisis level. |
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