LONDON: Global foreign exchange reserves fell in the first quarter of 2015, extending a trend that started in third quarter of last year, and the euro’s share hit a 13-year low as Asian central banks stepped up sales.

Data from the International Monetary Fund (IMF) showed global foreign exchange reserves fell to $11.433 trillion in the first quarter of 2015, from $11.589tr in the fourth quarter of 2014. The total amount of allocated foreign exchange holdings shrank to $6.062tr from $6.086tr in the prior quarter.

The value of euros held in allocated or known global foreign exchange reserves fell to $1.256tr from $1.343tr.

The IMF said the share of euros dropped to 20.7 per cent from a 22.2pc share in the previous quarter, its lowest in more than a decade, and a far cry from its peak in 2009, when the euro’s share of reserves was at 28pc.

Global central banks held $3.88tr worth of reserves in US dollars, up from $3.83tr in the fourth quarter, with the greenback’s share of allocated reserves rising to 64.12pc from 62.9pc.

Global reserves are assets of central banks held in different currencies, primarily to back their liabilities. Central banks sometimes buy and sell currencies from official international reserves to influence exchange rates.

Published in Dawn, July 1st, 2015

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