In the face of a much-stronger US dollar, which has often been considered as an undue exaggeration over the recent months, American dollar’s share of global foreign currency reserve tumbled to its weakest level since 2013 during the second quarter of the year, while shares of a more-stable Chinese Yuan on global FX reserve spiked to its highest level in nearly two decades, data released by IMF (International Monetary Fund), a sister organization to World Bank accountable for fostering global economic growth, had revealed earlier this week.
Aside from that, according to latest IMF data, countries holding American dollar as their FX reserve had totalled $6.79 trillion on Q2, 2019, remarking a 61.63 per cent of allocated reserves which had been the smallest FX share of the American currency since 2013, when the benchmark index was tumbled to 61.27 per cent.
On the flipside, share of FX reserves held in Japanese Yen, euro alongside Chinese Yuan, all had witnessed an unprecedented surge during the second quarter of this year, suggesting a growing trend where an over-valued US dollar’s share in the global FX reserve had been going through a steep plunge.
Meanwhile, referring to a rapidly accelerating acceptance of Japanese Yen, Chinese Yuan and euro as global FX reserves, a partner of currency trading with Tempus Inc. in Washington, Juan Perez said late on Monday (September 30th), “With the yuan becoming a reserve currency with the IMF’s blessing, it means loans and things that were not denominated in yuan are now prevalent.
Additionally, euro and yen increased in the reserves of other banks who saw the euro as a safe-haven because of the European Central Bank’s commitment to the currency, while the yen’s safe-haven status made it more attractive with every scare or potential for regression in economic progress. ”