Appendix I. International reserves
- International Monetary Fund
- Published Date:
- November 2005
Total international reserves, including gold, increased by 15 percent during 2004 and stood at SDR 2.7 trillion at the end of the year (Table I.1). Foreign exchange reserves, which constitute the largest component of official reserve holdings, grew by 18 percent, to SDR 2.4 trillion. IMF-related assets, which make up the rest of nongold reserves, declined by 12 percent to SDR 76 billion, reflecting the recent decline in outstanding credit to member countries. The market value of gold held by monetary authorities decreased by 1 percent to SDR 254 billion in 2004.1
|Total reserves excluding gold|
|Reserve positions in the Fund||54.8||47.4||56.9||66.1||66.5||55.8||50.7|
|Subtotal, IMF-related assets||73.2||65.9||76.4||85.7||86.4||76.1||70.9|
|Total reserves excluding gold||1,372.8||1,556.1||1,709.5||1,856.7||2,123.9||2,483.3||2,609.3|
|Quantity (millions of ounces)||967.1||952.1||942.8||930.6||913.1||900.2||894.1|
|Value at London market price||204.5||200.6||207.4||234.6||256.4||253.9||253.0|
|Total reserves including gold||1,577.3||1,756.6||1,916.9||2,091.3||2,380.3||2,737.2||2,862.3|
|Total reserves excluding gold|
|Reserve positions in the Fund||46.8||39.7||47.0||53.7||52.6||43.6||38.9|
|Subtotal, IMF-related assets||61.5||54.1||62.9||69.5||67.9||58.9||53.0|
|Total reserves excluding gold||590.2||656.1||689.7||731.0||820.2||904.3||913.3|
|Quantity (millions of ounces)||810.4||796.5||783.5||769.8||754.3||740.6||735.3|
|Value at London market price||171.4||167.8||172.4||194.1||211.8||208.9||208.1|
|Total reserves including gold||761.6||823.9||862.1||925.1||1,032.0||1,113.2||1,121.3|
|Total reserves excluding gold|
|Reserve positions in the Fund||8.0||7.7||9.9||12.3||13.9||12.2||11.7|
|Subtotal, IMF-related assets||11.7||11.8||13.5||16.2||18.5||17.2||17.9|
|Total reserves excluding gold||782.6||899.9||1,019.8||1,125.7||1,303.7||1,579.0||1,696.0|
|Quantity (millions of ounces)||156.6||155.6||159.2||160.7||158.8||159.6||158.8|
|Value at London market price||33.1||32.8||35.0||40.5||44.6||45.0||44.9|
|Total reserves including gold||815.8||932.7||1,054.8||1,166.2||1,348.3||1,624.1||1,740.9|
|Net debtor developing countries|
|Total reserves excluding gold|
|Reserve positions in the Fund||5.6||5.4||6.4||8.0||9.2||8.5||8.1|
|Subtotal, IMF-related assets||8.7||8.7||9.1||11.0||12.7||12.3||13.1|
|Total reserves excluding gold||617.3||713.4||814.7||899.4||1,052.2||1,292.3||1,406.6|
|Quantity (millions of ounces)||130.6||129.6||133.2||135.0||133.4||134.3||133.4|
|Value at London market price||27.6||27.3||29.3||34.0||37.5||37.9||37.8|
|Total reserves including gold||644.9||740.7||844.0||933.4||1,089.6||1,330.2||1,444.4|
|Net debtor developing countries without debt-servicing problems|
|Total reserves excluding gold|
|Reserve positions in the Fund||4.8||4.6||5.7||7.3||8.3||7.5||7.1|
|Subtotal, IMF-related assets||7.2||6.7||7.7||9.2||10.5||9.7||9.4|
|Total reserves excluding gold||495.8||577.2||671.2||761.2||894.6||1,111.3||1,206.1|
|Quantity (millions of ounces)||85.4||84.6||88.3||89.9||88.2||88.4||88.4|
|Value at London market price||18.1||17.8||19.4||22.7||24.8||24.9||25.0|
|Total reserves including gold||513.9||595.1||690.6||783.8||919.4||1,136.2||1,231.1|
Foreign exchange reserves
Foreign exchange reserves comprised 97 percent of nongold assets at the end of 2004. Developing countries held 65 percent of all foreign exchange reserves (SDR 1.6 trillion) at the end of 2004, increasing their holdings by 22 percent. During 2004, foreign exchange holdings of industrial countries rose by 12 percent to SDR 845 billion.
In 2004, the foreign exchange assets of the oil-exporting developing countries, which amount to 8 percent of all developing countries’ foreign exchange reserves, increased by 18 percent to SDR 133 billion. Foreign exchange reserves of the net creditor developing country group rose by 15 percent, to SDR 282 billion, and those of net debtor countries grew by 23 percent to SDR 1.3 trillion. Foreign exchange reserves of net debtors without debt-servicing problems increased by 25 percent to SDR 1.1 trillion, while those of countries with debt-servicing problems increased by 15 percent to SDR 178 billion.
Holdings of IMF-related assets
During 2004, total IMF-related assets (that is, reserve positions in the IMF and SDRs) declined by 12 percent, following three years of increase. Members’ reserve positions in the IMF—which consist of members’ reserve tranche and creditor positions—declined by 16 percent to SDR 56 billion, while the SDR holdings of IMF members remained at SDR 20 billion. The decline in the reserve positions was attributed mostly to industrial countries, which account for more than three-fourths of the reserve positions and SDR holdings.
The market value of gold reserves declined by 1 percent to SDR 254 billion in 2004, reflecting a 1 percent decline in the physical stock of official gold. The share of gold in officially held reserves declined gradually to 9 percent by the end of 2004, whereas in the early 1980s gold represented about half of all officially held reserves. Most of the gold reserves (82 percent) are held by industrial countries: gold constituted 19 percent of these countries’ total reserves at the end of 2004. Gold reserves accounted for 3 percent of the total reserves of the developing countries.
Developments during the first quarter of 2005
During the first quarter of 2005, total reserve assets rose by SDR 125 billion and foreign exchange reserves by SDR 131 billion. Reflecting the decline in the physical stock of gold since the end of 2004, the market value of gold reserves decreased by nearly SDR 1 billion, and holdings of IMF-related assets declined by SDR 5 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 59 percent in 1995 to 71 percent in 1999, and remaining broadly stable in 2000 and 2001 (Table I.2).2 In 2002, however, the share of U.S. dollar holdings sharply declined to 67 percent, driven by the fall in the value of U.S. dollar holdings and a reduced share of U.S. dollar assets in net purchases of reserves (Table I.3). Over the subsequent two years, the dollar share remained at a similar level. While the official reserves held in U.S. dollars picked up strongly over these two years—accounting for more than 80 percent of the quantity increase in official reserve holdings—this was offset by the weakening of the U.S. dollar vis-à-vis other major currencies (see the last paragraph for details).
|Change in holdings||117,987||85,753||16,854||80,421||90,643||51,512||–8,787||95,901||128,324|
|Change in holdings||10,101||–2,774||2,373||7,128||7,433||–8,214||–5,634||1,409||4,936|
|Change in holdings||8,152||1,484||–103||4,764||2,518||1,177||4,328||490||15,566|
|Change in holdings||246||710||–278||–700||589||546||1,868||–2,281||–571|
|Change in holdings||—||—||—||44,3032||34,025||25,754||67,512||54,780||42,091|
|Change in holdings||15,405||11,512||–10,958||—||—||—||—||—||—|
|Change in holdings||–645||–2,170||1,209||—||—||—||—||—||—|
|Change in holdings||–183||1,265||–828||—||—||—||—||—||—|
|European currency unit|
|Change in holdings||984||–3,242||–46,110||—||—||—||—||—||—|
|Sum of the above3|
|Change in holdings||152,049||92,538||–37,841||135,915||135,209||70,775||59,287||150,300||190,345|
|Change in holdings||3,753||–1,498||5,275||–25,014||663||–1,520||3,152||8,955||1,977|
|Total official holdings4|
|Change in holdings||154,271||108,683||–30,339||132,087||190,623||142,863||137,928||266,493||369,751|
The euro, which replaced 11 European currencies and the European currency unit (ECU) on January 1,1999, accounted for 25 percent of total foreign exchange reserves in 2003 and 2004, higher than its average in preceding years. Given that, at the introduction of the euro, the euro system’s reserves previously denominated in euro-legacy currencies3 became domestic assets of the euro area, the share of the euro in 1999–2004 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.
The share of the Japanese yen in total foreign exchange reserves declined from 7 percent at end-1995 to 4 percent at the end of 2004. During the past decade, the share of pound sterling has been in the 2–3 percent range, while that of the Swiss franc has remained below 1 percent. The share of other currencies, which comprise currencies not identified in Table I.2, has been less than 2 percent since 1999. The share of unallocated reserves, for which no information on currency composition is available, rose to more than 30 percent of global reserves in 2004.
Changes in Table I.2
Table I.2 in this year’s report reflects changes in the underlying database on the Composition of Official Foreign Exchange Reserves (COFER). The most important changes include a significant curtailment of the use of estimation techniques when the currency composition of reserves is not reported, and a split of “Unspecified currencies” into two new categories, “Other currencies” and “Unallocated reserves,” in order to distinguish the reservesheld in currencies other than the major ones from the reserves whose currency composition has not been identified.
Data estimation and classification
This year’s data were compiled under a new rule that the estimation of the currency composition of reserves be limited to data gaps of less than four quarters. As a result, the aggregate currency composition is now calculated almost exclusively on the basis of reserves data reported by the authorities to COFER. Reserves held by nonreporting developing countries, for which the currency composition was previously estimated, have been moved to the new category “Unallocated reserves.”
In previous years, the “Unspecified currencies” category captured both foreign exchange reserves held in currencies other than the major currencies identified in Table I.2, and reserves held by those nonreporting countries for which the currency composition was not estimated. The presentation now disaggregates this category into “Other currencies” (currencies other than the major ones identified in the table) and “Unallocated reserves” (reserves held by countries that do/did not report to COFER).
The new presentation also reflects data improvements resulting, in part, from new and revised data reported by countries. The improvements entailed reclassifying part of the reserves that used to fall under “Unspecified currencies” into the major currencies listed in Table I.2.
Virtually all industrial countries, as defined in International Financial Statistics (IFS), report to COFER. The currency shares for industrial countries in Table I.2 are thus calculated from a fixed sample of countries, whose reserves in 2004 represented more than 99 percent of the total reserves held by industrial countries.
The currency shares for developing countries, as defined in IFS, are calculated from a moving sample: not all countries reported, and reporting countries did not necessarily report in all years. Over the 1995–2004 period, the number of developing country reporters ranged from 79 countries to 89 countries, out of a total of 159 developing countries in IFS. The reserves held by these reporting countries accounted for 50 to 65 percent of total developing country reserves over the same period.
On a regional basis, the rate of reporting compliance—measured in terms of the percentage of regional reserves accounted for by the reporters—is highest for countries from Europe and lowest for countries from Asia.
Comparison of the new and old presentations
The new and old presentations are not directly comparable, because the new presentation is based on a smaller pool of reserves whose currency composition is mostly reported by the authorities. Subject to that qualification, the following major differences with the data presented in the 2004 Annual Report are noted.
For industrial countries, the major change is an increase in the euro’s share by about 2 percentage points, on average, reflecting primarily data revisions by a major industrial country.
For developing countries, the average share of reserves held in U.S. dollars in the period 1999–2003 is higher by 5 percentage points under the new presentation and the euro’s share is higher by 7 percentage points. In contrast, the share of pound sterling is lower by 2 percentage points, and the share of other currencies (new presentation) is about 10 percentage points lower than the share of unspecified currencies (the 2004 Annual Report). These changes reflect the curtailment of estimation under the new methodology and data improvements over the past year.
For all countries, as a result, the average share of reserves held in U.S. dollars for the period 1999–2003 is higher by about 4 percentage points under the new presentation; the euro’s share is higher by 4 percentage points; sterling’s share is lower by about 1 percentage point; and the share of other currencies (new presentation) is about 6 percentage points lower than the share of unspecified currencies (the 2004 Annual Report).
For industrial countries, the share of U.S. dollar holdings increased throughout the 1990s, peaking at 74 percent in 1999 and amounting to 72 percent at the end of 2004. The share of the euro in industrial countries’ foreign exchange reserves declined slightly in 2004, to 21 percent, while the share of the yen remained broadly unchanged over 2003–04. The shares of pound sterling and the Swiss franc have remained broadly constant over the past 10 years.
The share of the U.S. dollar in developing countries’ foreign exchange reserves declined to 60 percent in 2004, lower than the average in preceding years. Holdings of the euro rose to 29 percent of those countries’ foreign exchange reserves, nearly 10 percentage points higher than the euro’s share in its initial years (1999 and 2000). Over the past decade, the share of the yen has gradually decreased by about 3 percentage points, to 4 percent at the end of 2004, while the share of pound sterling has increased by about 3 percentage points, to 5 percent in 2004. The share of the Swiss franc has remained below 1 percent over the same period.
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 128 billion in 2004, as an increase of SDR 176 billion in the quantity of U.S. dollar holdings was offset by a valuation decline of SDR 48 billion. Euro holdings increased by SDR 42 billion, reflecting a quantity increase of SDR 29 billion and a valuation increase of SDR 13 billion. Japanese yen holdings increased by SDR 5 billion as a quantity increase of SDR 6 billion was offset by a valuation decline of SDR 1 billion. Pound sterling holdings increased by SDR 16 billion, whereas Swiss franc holdings declined by SDR 0.5 billion.
Official monetary authorities comprise central banks and also currency boards, exchange stabilization funds, and treasuries, to the extent that they perform monetary authorities’ functions.
The currency composition data in the 2005 Annual Report are not directly comparable to the information in previous annual reports owing to data revision. See Table I.2 for details.
Those foreign exchange reserves that, up to December 31, 1998, were denominated in the former national currencies of the euro area countries and private ECUs.