Reuters
Economy
UPDATE 1 - USD reserves up, Australian, Canadian dlr holdings climb -IMF
Fri, Jun 28 12:05 PM EDT

NEW YORK, June 28 (Reuters) - The U.S. dollar's share of known reserves held by global central banks edged higher in the first quarter, data from the International Monetary Fund showed on Friday.

For the first time, the IMF broke down central bank holdings in the Australian and Canadian dollars, which were previously classified under "Other Currencies."

Central banks held US$98.66 billion in the Australian currency globally as of the first quarter, or 1.63 percent of allocated reserves. They held US$94.93 billion in Canadian dollars, or 1.57 percent of known reserves.

The IMF also provided data on reserves held in these two currencies in the previous quarter, with US$89.74 billion in the Australian dollar, or 1.48 percent, and US$90.05 billion in the Canadian dollar, also 1.48 percent.

U.S. dollar reserves rose to $3.76 trillion in the January to March period, or 62.2 percent, from $3.73 trillion, or 61.2 percent in the previous quarter.

Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York, said the IMF data suggests "the demise of the dollar has been exaggerated." He said the share of reserves in the Australian and Canadian dollars is a bit less than expected, which will leave investors guessing which other currencies are in the "other" category.

Global reserves are assets of central banks held in different currencies primarily used to back their liabilities. Central banks have sometimes cooperated in buying and selling official international reserves in order to influence exchange rates.

Euro reserves fell to $1.43 trillion in the first quarter, or 23.7 percent, the lowest percentage value since the second quarter of 2004. In the prior quarter, euro reserves stood at $1.47 trillion, or 24.2 percent.

Since 2009, the euro's share of reserve assets has been on a declining path on concerns about the region's sovereign and economic crisis. At its peak in 2009, the euro's share of reserves reached just under 28 percent.

The yen's share fell to 3.9 percent in the first quarter from 4.0 percent.

The Australian dollar fell 0.8 percent against the Canadian dollar at C$0.9630 after the release of IMF data.

Against the U.S. currency, the Australian dollar fell 1.2 percent to $0.9163. The greenback gained 0.5 percent to C$1.0531.

Total global central bank reserves rose to a record of $11.09 trillion in the first quarter, in which the Australian and Canadian dollars each accounted for about 0.9 percent.

The Australian and Canadian dollars have been in demand since the global financial crisis as relatively safe havens. The Aussie in particular was highly desired given its yield.

The Australian dollar has gained about 30 percent against the U.S. dollar since the end of 2008, while the Canadian dollar is up 16 percent.

The move by the IMF is part of a wider review to provide more transparency in global financial data. It is also a reflection of a growing trend by central banks around the world to diversify their holdings beyond the U.S. dollar, the euro and the yen.

Allocated reserves fell to $6.05 trillion in the first quarter, or 54.6 percent, from $6.08 trillion in the previous period.

Unallocated reserves, or those not known and believed mostly held by China, rose to $5.04 trillion in the first quarter from $4.9 trillion in the previous period.


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