Strolling away from the dollar
All this talk about ditching the dollar as world reserve currency may be irrelevant — central banks are already walking away. The latest International Monetary Fund figures show dollar share of world FX reserves falling to 64.0 percent in last year’s fourth quarter from 64.4 percent the previous quarter. Doesn’t sound much, but at that pace dollar is less than half of world reserves in less than a decade. years. It was the same for once mighty sterling. The pound’s share dropped to 4 percent from 4.5 percent. The euro rose 1 percentage point to 26.5 percent.
Marc Chandler of Brown Brothers Harriman says not too much should be made of this though. “The reserve figures are heavily influenced by valuation swings,” he says.
Still, given the debate about SDRs. . .
(Reuters photo: Kai Pfaffenbach)