{"id":61223,"date":"2022-01-02T07:28:03","date_gmt":"2022-01-02T12:28:03","guid":{"rendered":"https:\/\/olduvai.ca\/?p=61223"},"modified":"2022-01-02T07:28:03","modified_gmt":"2022-01-02T12:28:03","slug":"us-dollars-status-as-dominant-global-reserve-currency-at-25-year-low-and-usd-exchange-rates","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=61223","title":{"rendered":"US Dollar\u2019s Status as Dominant \u201cGlobal Reserve Currency\u201d at 25-Year Low. And USD Exchange Rates?"},"content":{"rendered":"
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US Dollar\u2019s Status as Dominant \u201cGlobal Reserve Currency\u201d at 25-Year Low. And USD Exchange Rates?<\/a><\/h3>\n<\/header>\n
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Euro\u2019s 20th birthday after dreams of \u201cDollar Parity\u201d put on ice during Euro Debt Crisis. Central banks still leery of Chinese renminbi.<\/strong><\/p>\n

The global share of US-dollar-denominated exchange reserves declined to 59.15% in the third quarter, from 59.23% in the second quarter, hobbling along a 26-year low for the past four quarters, according to the IMF\u2019s COFER data released today. Dollar-denominated foreign exchange reserves are Treasury securities, US corporate bonds, US mortgage-backed securities, and other USD-denominated assets that are held by foreign central banks.<\/p>\n

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In 2001 \u2013 the moment just before the euro officially arrived as bank notes and coins \u2013 the dollar\u2019s share was 71.5%. Since then, it has dropped by 12.3 percentage points.<\/p>\n

In 1977, when inflation was raging in the US, the dollar\u2019s share was 85%. And when it looked like the Fed wasn\u2019t doing anything about inflation that was threatening to spiral out of control, foreign central banks began dumping USD-denominated assets, and the dollar\u2019s share collapsed.<\/p>\n

The plunge of the dollar\u2019s share bottomed out in 1991, after the inflation crackdown in the early 1980s caused inflation to abate. As confidence grew that the Fed would keep inflation more or less under control, the dollar\u2019s share then surged by 25 percentage points until 2000 when the euro arrived.<\/p>\n

Since then, over those 20 years, other central banks have been gradually diversifying away from US dollar holdings (year-end data, except for 2021 = Q3):<\/p>\n

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Not included in global foreign exchange reserves are the assets held by a central bank in its own currency, such as the Fed\u2019s holdings of dollar-denominated assets, the ECB\u2019s holdings of euro-denominated assets, or the Bank of Japan\u2019s holdings of yen-denominated assets.<\/p>\n

Impact of exchange rates on exchange reserves.<\/strong><\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

US Dollar\u2019s Status as Dominant \u201cGlobal Reserve Currency\u201d at 25-Year Low. And USD Exchange Rates? Euro\u2019s 20th birthday after dreams of \u201cDollar Parity\u201d put on ice during Euro Debt Crisis. Central banks still leery of Chinese renminbi. The global share of US-dollar-denominated exchange reserves declined to 59.15% in the third quarter, from 59.23% in the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[309,839,4254,4255,5482],"class_list":["post-61223","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fiat-currency","tag-us-dollar","tag-wolf-richter","tag-wolfstreet","tag-world-reserve-currency"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/61223","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=61223"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/61223\/revisions"}],"predecessor-version":[{"id":61224,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/61223\/revisions\/61224"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=61223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=61223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=61223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}