Economy

US Dollar : Global Reserves stays flat in Q2/2023.

The U.S. dollar’s share of global foreign exchange reserves reported to the International Monetary Fund was 58.9% in the second quarter, unchanged from that of the first three months of the year, IMF data showed on Friday.
US dollar claims rose 0.8% to $6.576 trillion in the second quarter, but actually fell 1% from a year earlier. The euro’s share increased slightly to 19.9% in the second quarter, from 19.8% in the previous three months. Euro claims grew 1% in the quarter, but were up 2% from a year earlier.
The dollar is still the dominant currency in international foreign exchange and financing. Its share of over-the-counter FX transactions has remained remarkably stable but the greenback’s share of foreign exchange reserves has followed a “gradual downward trend”, falling by more than 10 percentage points over the past 20 years. Much of this shift has been driven by a rotation into other developed market currencies, such as the euro, British pound, Canadian dollar and Australian dollar. The Chinese renminbi also took over a share of the reserves, but from a very low level.
Is there a high level of risk on the dollar that threatens its dominance?
Global reserves, reported in US dollars, are central bank assets held in various currencies used in part to support its liabilities. Central banks sometimes use reserves to support their respective currencies.
The dollar index rose 3.1% in the second quarter, recovering from a 0.9% decline in the first quarter. In the fourth quarter of 2022, the dollar index fell 7.7%.
The euro, however, lost 3.1% in the quarter, after rising by 1.2% in the first three months of the year. It increased 9.3% in the final three months of 2022.

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