Reuters: US Dollar Report: UPDATE 1-Dollar share of global reserves steady in Q1-IMF

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UPDATE 1-Dollar share of global reserves steady in Q1-IMF Jun 29th 2012, 16:58 Fri Jun 29, 2012 12:58pm EDT NEW YORK, June 29 (Reuters) - Global central banks' currency reserves surged to another record in the first quarter of this year, while the U.S. dollar share of these holdings remained steady, data from the International Monetary Fund showed on Friday. The greenback's share of the roughly $5.7 trillion known reserves was 62.2 percent, roughly unchanged from the fourth quarter of 2012, the IMF data showed. Meanwhile, the euro's share edged lower to 24.9 percent from 25.0 percent at the end of last year. The report temporarily negates views about global central banks shying away from the safe-haven dollar and reinforces the greenback's status as the global reserve currency of choice. Global central bank holdings rose to a record $10.4 trillion in the first quarter after rising consistently over the last two years. "The evidence suggests that central banks are showing a slightly more favorable attitude to the U.S. dollar relative to the euro over the past year," said Alan Ruskin, head of G10 FX strategy at Deutsche Bank in New York. U.S. dollar reserves grew 9 percent from a year earlier, while euro reserves were up just 1 percent. The dollar held its share of global reserves despite the dollar index falling 1.5 percent in the first quarter of 2012. In contrast, the euro had risen 3 percent in the first three months of the year and yet its share slipped and has declined for at least the last four quarters. In 1999, the euro had an 18 percent share of reserves, peaking at 28 percent in 2009, steadily falling since then. Data also showed that reserves of developed economies rose to $3.4 trillion from $3.39 trillion in the fourth quarter of 2011, while that of developing nations grew to nearly $7 trillion as emerging market central banks intervened to slow the strength of their currencies. However, the reserves report may not provide the true picture, given that the unknown or unallocated reserves grew. Data showed that unallocated reserves, which looked to be mostly accounted for by China, rose to $4.7 trillion in the first quarter from $4.5 trillion at the end of last year. Another interesting feature of the reserves data was the growth in "other currencies," which usually refers to commodity-linked currencies such as the Australian and Canadian dollars. While their share of overall currency reserves remained generally steady at around 5.2 percent during the period, central banks' holdings of "other currencies" jumped 17.5 percent on a year-on-year basis. Link this Share this Digg this Email Reprints

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