Chapter

Appendix I: International Reserves

Author(s):
International Monetary Fund
Published Date:
October 2004
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Total international reserves, including gold, increased by 14 percent during 2003 and stood at SDR 2.4 trillion at the end of the year (Table I.1). Foreign exchange reserves, which constitute the largest component of official reserve holdings, grew by 15 percent, to SDR 2.0 trillion. IMF-related assets, which make up the rest of nongold reserves, remained broadly unchanged at SDR 86 billion. The market value of gold held by monetary authorities increased by 9 percent to SDR 256 billion in 2003.1

Table I.1Official Holdings of Reserve Assets1(In billions of SDRs)
199819992000200120022003March

2004
All countries
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF60.654.847.456.966.166.563.5
SDRs20.418.518.519.619.719.920.2
Subtotal, IMF-related assets81.073.265.976.485.786.483.8
Foreign exchange1,167.01,297.81,485.51,627.91,763.22,028.02,208.7
Total reserves excluding gold1,248.01,371.01,551.31,704.31,848.92,114.42,292.5
Gold2
Quantity (millions of ounces)968.4967.1952.1942.8930.6913.1911.3
Value at London market price197.9204.5200.6207.4234.6256.4260.8
Total reserves Including gold1,446.01,575.61,751.91,911.72,083.52,370.82,553.3
Industrial countries
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF53.946.839.747.053.752.650.6
SDRs15.814.714.416.015.815.315.4
Subtotal, IMF-related assets69.861.554.162.969.567.966.0
Foreign exchange475.8526.1596.2620.5653.0742.7845.1
Total reserves excluding gold545.6587.6650.3683.4722.5810.6911.1
Gold2
Quantity (millions of ounces)808.7810.4796.5783.5769.8754.3752.0
Value at London market price165.3171.4167.8172.4194.1211.8215.2
Total reserves Including gold710.9759.0818.1855.8916.61,022.41,126.3
Developing countries
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF6.78.07.79.912.313.912.9
SDRs4.53.74.13.63.94.64.8
Subtotal, IMF-related assets11.211.711.813.516.218.517.8
Foreign exchange691.2771.7889.21,007.41,110.11,285.31,363.6
Total reserves excluding gold702.4783.4901.01,020.91,126.41,303.81,381.4
Gold2
Quantity (millions of ounces)159.7156.6155.6159.2160.7158.8159.3
Value at London market price32.733.132.835.040.544.645.6
Total reserves Including gold735.1816.6933.81,055.91,166.91,348.41,427.0
Net debtor developing countries
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF5.05.65.46.48.09.28.8
SDRs3.33.13.32.72.93.63.8
Subtotal, IMF-related assets8.48.78.79.111.012.712.5
Foreign exchange550.1609.4705.8806.7889.01,039.61,100.9
Total reserves excluding gold558.4618.1714.4815.8900.01,052.31,113.5
Gold2
Quantity (millions of ounces)133.3130.6129.6133.2135.0133.4133.9
Value at London market price27.227.627.329.334.037.538.3
Total reserves including gold585.7645.7741.7845.1934.01,089.81,151.8
Net debtor developing countries without debt-servicing problems
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF4.64.84.65.77.38.37.9
SDRs2.62.42.12.11.92.22.2
Subtotal, IMF-related assets7.27.26.77.79.210.510.2
Foreign exchange428.5489.4571.7664.6752.7884.4940.7
Total reserves excluding gold435.7496.7578.3672.3761.9894.9950.9
Gold2
Quantity (millions of ounces)87.685.484.688.389.988.288.3
Value at London market price17.918.117.819.422.724.825.3
Total reserves Including gold453.6514.7596.2691.8784.6919.7976.2
Source: International Monetary Fund, International Financial Statistics.Note: Components may not sum to totals because of rounding.

End-of-year figures for all years except 2004. “IMF-related assets” comprise reserve positions in the IMF and SDR holdings of all IMF members. The entries under “Foreign exchange” and “Gold” comprise official holdings of those IMF members for which data are available and certain countries or areas.

One troy ounce equals 31.103 grams. The market price is the afternoon price fixed in London on the last business day of each period.

Source: International Monetary Fund, International Financial Statistics.Note: Components may not sum to totals because of rounding.

End-of-year figures for all years except 2004. “IMF-related assets” comprise reserve positions in the IMF and SDR holdings of all IMF members. The entries under “Foreign exchange” and “Gold” comprise official holdings of those IMF members for which data are available and certain countries or areas.

One troy ounce equals 31.103 grams. The market price is the afternoon price fixed in London on the last business day of each period.

Foreign Exchange Reserves

Foreign exchange reserves accounted for 96 percent of nongold assets at the end of 2003. The developing countries, which held 63 percent of all foreign exchange reserves at the end of 2003, increased their holdings by 16 percent, to SDR 1.3 trillion, continuing the trend set in recent years. During 2003. the foreign exchange holdings of industrial countries rose by 14 percent, to SDR 743 billion.

In 2003, the oil-exporting developing countries’ foreign exchange assets, which amount to nearly 10 percent of all developing countries’ foreign exchange reserves, increased by 9 percent, to SDR 113 billion. The foreign exchange reserves of the net creditor developing country group rose by 11 percent, to SDR 246 billion, and those of net debtor countries grew by 17 percent, to SDR 1.0 trillion. Foreign exchange reserves of net debtors without debt-servicing problems increased by 18 percent, to SDR 884 billion, while those of countries with debt-servicing problems increased by 14 percent, to SDR 155 billion.

Holdings of IMF-Related Assets

During 2003, total IMF-related assets (that is, reserve positions in the IMF and SDRs) increased by less than 1 percent, following increases of more than 10 percent in the two preceding years. Industrial member countries hold a majority of IMF-related assets: 79 percent at the end of 2003. Members’ reserve positions in the IMF-which consist of members’ reserve tranche and creditor positions-remained broadly unchanged at SDR 67 billion, with the SDR holdings of IMF members remaining unchanged at SDR 20 billion.

Gold Reserves

The market value of gold reserves increased by 9 percent in 2003, to SDR 256 billion, reflecting an 11 percent increase in the SDR price of gold and a 2 percent decline in the physical stock of official gold. The share of gold in officially held reserves has declined gradually to 11 percent by the end of 2003, whereas, in the early 1980s, gold made up about half of all officially held reserves. Most of the gold reserves (83 percent) are held by industrial countries: gold constituted 21 percent of these countries’ total reserves at the end of 2003. Gold reserves accounted for 3 percent of the total reserves of the developing countries.

Developments During the First Quarter of 2004

Total reserve assets rose by SDR 183 billion during the first quarter of 2004, whereas foreign exchange reserves increased by SDR 181 billion over the same period. Reflecting an increase in the SDR price of gold since the end of 2003, the market value of gold reserves increased by nearly SDR 5 billion during the first quarter of 2004, while the physical stock of official gold declined by 2 million ounces. Holdings of IMF-related assets declined by SDR 3 billion.

Currency Composition of Foreign Exchange Reserves

The currency composition of foreign exchange reserves has changed gradually over the past decade, with the share of U.S. dollar holdings in foreign exchange reserves rising from 53 percent in 1994 to 67 percent in 2001 (Table I.2).2 In 2002 and 2003, however, the share of U.S. dollar holdings declined to 64 percent. Notwithstanding a substantial increase in official reserves held in U.S. dollars over these two years, the weakening of the U.S. dollar vis-à-vis other major currencies implied a decline in the share of U.S. dollar holdings (see the last paragraph for details). The euro, which replaced 11 European currencies and the European currency unit (ECU) on January 1, 1999, accounted for 20 percent of total foreign exchange reserves in 2003, higher than its average since 1999. Given that, at the introduction of the euro, the Eurosystem’s reserves previously denominated in euro legacy currencies3 became domestic assets of the euro area, the share of the euro in 1999-2003 is not directly comparable with the previous years’ combined share of the four euro legacy currencies identified in Table I.2: deutsche mark, French franc, Netherlands guilder, and private ECU. However, after adjusting the data to take into account only holdings of these currencies outside the euro area, their combined share in 1998 was virtually identical to the share of the euro in 1999.

Table I.2Share of National Currencies in Total Identified Official Holdings of Foreign Exchange, End of Year1(In percent)
1994199519961997199819992000200120022003
All countries
U.S. dollar53.153.456.859.162.664.966.666.963.563.8
Japanese yen7.86.76.05.15.45.46.25.55.24.8
Pound sterling2.82.83.03.33.53.63.84.04.44.4
Swiss franc0.60.50.50.50.50.40.50.50.60.4
Euro213.516.316.719.319.7
Deutsche mark15.314.714.013.713.1
French franc2.52.41.91.51.7
Netherlands guilder0.70.50.40.50.5
ECU37.76.85.95.00.8
Unspecified currencies49.512.111.511.312.012.16.66.47.16.8
Industrial countries
U.S. dollar50.851.856.157.966.772.772.572.769.170.8
Japanese yen8.26.65.65.86.66.56.35.64.64.0
Pound sterling2.32.12.01.92.22.32.01.82.21.7
Swiss franc0.20.10.10.10.20.10.20.30.60.2
Euro210.817.217.521.320.9
Deutsche mark16.316.415.615.913.4
French franc2.42.31.70.91.3
Netherlands guilder0.30.20.20.20.2
ECU314.613.412.010.91.9
Unspecified currencies*5.07.06.76.47.47.61.82.12.22.3
Developing countries
U.S. dollar55.655.157.460.259.459.062.262.959.859.3
Japanese yen7.56.86.44.64.44.66.15.45.55.2
Pound sterling3.53.43.94.44.44.65.15.45.86.2
Swiss franc1.20.90.90.70.70.70.70.60.60.6
Euro15.615.616.217.918.9
Deutsche mark14.113.012.611.912.9
French franc2.62.42.21.92.0
Netherlands guilder1.10.90.70.70.7
ECU3
Unspecified currencies514.617.316.015.515.515.510.29.410.49.8
Note: See text footnote 2 on page 101.

Only IMF member countries that report their official holdings of foreign exchange are included in this table. Data available as of end-February, 2004.

Not comparable with the combined share of euro legacy currencies in previous years because amounts exclude the euros received by euro area members when their previous holdings of other euro area members’ legacy currencies were converted into euros on January 1, 1999.

In the calculation of currency shares, the ECU is treated as a separate currency. ECU reserves held by the monetary authorities existed in the form of claims on both the private sector and the European Monetary Institute (EMI), which issued official ECUs to European Union central banks through revolving swaps against the contribution of 20 percent of their gross gold holdings and U.S. dollar reserves. On December 31, 1998, the official ECUs were unwound into gold and U.S. dollars; hence, the share of ECUs at the end of 1998 was sharply lower than a year earlier. The remaining ECU holdings reported for 1998 consisted of ECUs issued by the private sector, usually in the form of ECU deposits and bonds. On January 1, 1999, these holdings were automatically converted into euros.

The residual is equal to the difference between total foreign exchange reserves of IMF member countries and the sum of the reserves held in the currencies listed in the table.

The calculations here rely to a greater extent on IMF staff estimates than do those provided for the group of industrial countries.

Note: See text footnote 2 on page 101.

Only IMF member countries that report their official holdings of foreign exchange are included in this table. Data available as of end-February, 2004.

Not comparable with the combined share of euro legacy currencies in previous years because amounts exclude the euros received by euro area members when their previous holdings of other euro area members’ legacy currencies were converted into euros on January 1, 1999.

In the calculation of currency shares, the ECU is treated as a separate currency. ECU reserves held by the monetary authorities existed in the form of claims on both the private sector and the European Monetary Institute (EMI), which issued official ECUs to European Union central banks through revolving swaps against the contribution of 20 percent of their gross gold holdings and U.S. dollar reserves. On December 31, 1998, the official ECUs were unwound into gold and U.S. dollars; hence, the share of ECUs at the end of 1998 was sharply lower than a year earlier. The remaining ECU holdings reported for 1998 consisted of ECUs issued by the private sector, usually in the form of ECU deposits and bonds. On January 1, 1999, these holdings were automatically converted into euros.

The residual is equal to the difference between total foreign exchange reserves of IMF member countries and the sum of the reserves held in the currencies listed in the table.

The calculations here rely to a greater extent on IMF staff estimates than do those provided for the group of industrial countries.

The share of the Japanese yen in total foreign exchange reserves declined from 8 percent at the end of 1994 to 5 percent at the end of 2003. During the past decade, the share of pound sterling rose above 4 percent, while that of the Swiss franc remained below 1 percent. The share of unspecified currencies, which include currencies not identified in Table I.2, as well as foreign exchange reserves for which no information on currency composition is available, was 7 percent in 2003.

For industrial countries, the share of U.S. dollar holdings increased throughout the 1990s, peaking at 73 percent in 2001 and amounting to 71 percent at the end of 2003. In 2003, the shares of the euro and the yen in industrial countries’ foreign exchange reserves declined slightly to 21 and 4 percent, respectively. Shares of pound sterling and the Swiss franc have remained broadly constant over the past ten years, but the share of unspecified currencies fell to 2 percent in recent years.

The share of the U.S. dollar in developing countries’ foreign exchange reserves declined to 59 percent in 2003, close to the historical average over the last decade. Holdings of the euro rose to 19 percent of those countries’ foreign exchange reserves, one percentage point higher than in 2002. Over the past decade, the share of the yen has gradually decreased by about 2 percentage points, to 5 percent at the end of 2003, while the share of pound sterling has increased by about 2 percentage points, to 6 percent. The share of the Swiss franc has remained below 1 percent since 1997. Unspecified currencies accounted for 10 percent of developing countries’ foreign exchange reserves in 2003.

Changes in the SDR value of foreign exchange reserves can be decomposed into quantity and valuation (price) changes (Table I.3). Official reserves held in U.S. dollars increased by SDR 161 billion in 2003, as an increase of SDR 263 billion in the quantity of U.S. dollar holdings was offset by a valuation decline of SDR 102 billion. Euro holdings increased by SDR 56 billion, reflecting a quantity increase of SDR 22 billion and a valuation increase of SDR 34 billion. Japanese yen holdings increased by SDR 5 billion as quantity and valuation each increased by more than SDR 2 billion. Driven by the quantity effect, in 2003, pound sterling holdings increased by SDR 12 billion, whereas Swiss franc holdings declined by more than SDR 1 billion.

Table I.3Currency Composition of Official Holdings of Foreign Exchange, End of Year1(In millions of SDRs
1994199519961997199819992000200120022003
U.S. dollar
Change in holdings29,53669,406116,52088,19718,286102,343142,21189,25820,653161,210
Quantity change52,69774,08099,62047,84346,97584,93797,32054,425102,094263,017
Price change−23,161−4,67416,90040,353−28,68917,40644,89134,833−81,440−101,807
Year-end value397,403466,809583,328671,525689,812792,154934,3651,023,6231,044,2761,205,486
Japanese yen
Change in holdings5,969−242,636−3,1939797,02420,951−2,9019314,693
Quantity change3,0553,0167,982−69−3,465−2,14826,5255,718−2842,507
Price change2,914−3,041−5,346−3,1234,4449,172−5,574−8,6191,2152,186
Year-end value58,76158,73761,37258,18059,15966,18387,13484,23385,16489,857
Pound sterling
Change in holdings3,6032,7146,7536,2351,1036,1659,2047,27011,26212,008
Quantity change3,7193,2143,1944,8562,5816,31310,5756,7919,44210,899
Price change−116−5013,5601,379−1,478−148−1,3714791,8191,109
Year-end value21,31324,02730,78037,01538,11844,28353,48760,75672,01884,026
Swiss franc
Change in holdings−1,157−94534−3−69782,0534371,535−1,495
Quantity change−1,494−6691,16571−1127211,825350559−1,709
Price change337575−631−7443−64322887976215
Year-end value4,7834,6895,2235,2205,1515,2297,2827,7199,2537,759
Euro
Change in holdings5,649263,57527,15860,92155,520
Quantity change25,40367,24231,20133,67521,654
Price change−19,754−3,667−4,04227,24633,866
Year-end value165,018228,594255,752316,672372,193
Deutsche mark
Change in holdings12,78214,54215,47211,766−11,410
Quantity change7,6637,63022,04923,069−15,570
Price change5,1196,912−6,577−11,3044,160
Year-end value114,230128,772144,244156,010144,599
French franc
Change in holdings1,9812,069−872−3,3982,229
Quantity change1,306734−204−1,9871,849
Price change6761,335−668−1,411380
Year-end value18,67720,74619,87416,47618,705
Netherlands guilder
Change in holdings−417−171−1821,125−562
Quantity change−675−460471,524−727
Price change258289−229−399165
Year-end value4,8844,7134,5315,6555,093
European currency unit
Change in holdings9601,665985−3,240−47,848
Quantity change−1,035−1,1571,833515−49,304
Price change1,9942,822−849−3,7551,456
Year-end value57,61359,27860,26257,0229,174
Sum of the above3
Change in holdings53,25790,107141,84597,488−37,292121,259237,993121,22295,301231,936
Quantity change65,23786,389135,68675,821−17,774115,225203,48798,484145,486296,367
Price change−11,9803,7186,15921,667−19,5176,03434,50622,738−50,185−64,431
Year-end value677,663767,770909,6151,007,102969,8111,072,8681,310,8611,432,0821,527,3841,759,320
Total official holdings4
Change in holdings60,440122,044154,252108,692−30,649130,779187,663142,444135,262264,818
Year-end value812,676934,7191,088,9711,197,6631,167,0141,297,7941,485,4561,627,9001,763,1622,027,980
Note: See text footnote 2 on page 101.

The currency composition of foreign exchange is based on the IMF’s currency survey and on estimates derived mainly, but not solely, from official national reports. The numbers in this table should be regarded as estimates that are subject to adjustment as more information is received. Quantity changes are derived by multiplying the changes in official holdings of each currency from the end of one quarter to the next by the average of the two SDR prices of that currency prevailing at the corresponding dates. This procedure converts the change in the quantity of national currency from own units to SDR units of account. Subtracting the SDR value of the quantity change so derived from the quarterly change in the SDR value of foreign exchange held at the end of two successive quarters and cumulating these differences yields the effect of price changes over the years shown. Data available as of end-February, 2004.

Represents the change from end-1998 holdings of euro legacy currencies by official institutions outside the euro area.

Each item represents the sum of the currencies above.

Includes a residual whose currency composition could not be ascertained, as well as holdings of currencies other than those shown.

Note: See text footnote 2 on page 101.

The currency composition of foreign exchange is based on the IMF’s currency survey and on estimates derived mainly, but not solely, from official national reports. The numbers in this table should be regarded as estimates that are subject to adjustment as more information is received. Quantity changes are derived by multiplying the changes in official holdings of each currency from the end of one quarter to the next by the average of the two SDR prices of that currency prevailing at the corresponding dates. This procedure converts the change in the quantity of national currency from own units to SDR units of account. Subtracting the SDR value of the quantity change so derived from the quarterly change in the SDR value of foreign exchange held at the end of two successive quarters and cumulating these differences yields the effect of price changes over the years shown. Data available as of end-February, 2004.

Represents the change from end-1998 holdings of euro legacy currencies by official institutions outside the euro area.

Each item represents the sum of the currencies above.

Includes a residual whose currency composition could not be ascertained, as well as holdings of currencies other than those shown.

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