Chapter

APPENDIX I. International reserves

Author(s):
International Monetary Fund
Published Date:
September 2006
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Total international reserves, including gold, increased by 20 percent during 2005 and stood at SDR 3.3 trillion at the end of the year (Table I.1). Foreign exchange reserves, which constitute the largest component of official reserve holdings, grew by 21 percent, to SDR 2.9 trillion. IMF-related assets, which make up the rest of nongold reserves, declined by 36 percent to SDR 49 billion, reflecting the recent decline in outstanding credit to member countries. The market value of gold held by monetary authorities increased by 25 percent to SDR 317 billion in 2005.1

Table I.1Official holdings of reserve assets1(In billions of SDRs)
200020012002200320042005March

2006
All countries
Total reserves excluding gold
Fund-related assets
Reserve positions in the Fund47.456.966.166.555.828.622.2
SDRs18.519.619.719.920.320.117.3
Subtotal, Fund-related assets65.976.485.786.476.148.639.5
Foreign exchange1,491.01,633.61,772.02,038.52,414.32,918.83,014.6
Total reserves excluding gold1,556.81,710.11,857.82,124.92,490.42,967.53,054.1
Gold2
Quantity (millions of ounces)952.4943.0931.2913.6900.0882.0879.5
Value at London market price200.6207.5234.8256.5253.8316.6355.2
Total reserves including gold1,757.51,917.52,092.52,381.42,744.23,284.03,409.3
Industrial countries
Total reserves excluding gold
Fund-related assets
Reserve positions in the Fund39.747.053.752.643.621.015.8
SDRs14.416.015.815.315.312.412.5
Subtotal, Fund-related assets54.162.969.567.958.933.428.2
Foreign exchange602.6627.2662.4753.1846.5904.1897.5
Total reserves excluding gold656.7690.2731.9821.0905.3937.6925.7
Gold2
Quantity (millions of ounces)796.5783.5769.8754.3740.6723.8721.5
Value at London market price167.8172.4194.1211.8208.9259.8291.4
Total reserves including gold824.5862.6926.01,032.81,114.21,197.31,217.1
Developing countries
Total reserves excluding gold
Fund-related assets
Reserve positions in the Fund7.79.912.313.912.27.66.4
SDRs4.13.63.94.65.07.64.8
Subtotal, Fund-related assets11.813.516.218.517.215.211.3
Foreign exchange888.31,006.41,109.61,285.41,567.82,014.72,117.1
Total reserves excluding gold900.11,019.91,125.91,303.91,585.12,029.92,128.4
Gold2
Quantity (millions of ounces)155.9159.4161.3159.3159.4158.2158.0
Value at London market price32.835.140.744.745.056.863.8
Total reserves including gold932.91,055.01,166.51,348.71,630.02,086.72,192.2
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 2006. “Fund-related assets” are composed of 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 2006. “Fund-related assets” are composed of 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 represented 98 percent of nongold assets at the end of 2005. Developing countries held 69 percent of all foreign exchange reserves (SDR 2.0 trillion), having increased their holdings by 29 percent relative to end–2004. During 2005, foreign exchange holdings of industrial countries rose by 7 percent to SDR 904 billion, and the foreign exchange assets of oil-exporting developing countries, which amounted to 9 percent of all developing countries’ foreign exchange reserves, increased by 35 percent to SDR 179 billion.

Holdings of IMF-related assets

During 2005, total IMF-related assets (that is, reserve positions in the IMF and SDRs) declined by 36 percent, more sharply than in the previous year. Members’ reserve positions in the IMF—which consist of members’ reserve tranche and creditor positions—declined by 49 percent to SDR 29 billion, while the SDR holdings of IMF members remained at SDR 20 billion. The decline in the reserve positions was mostly attributed to industrial countries, which account for more than three-fourths of the reserve positions and SDR holdings.

Gold reserves

The market value of gold reserves increased by 25 percent to SDR 317 billion in 2005, as the strong gold price more than offset the 2 percent decline in the physical stock of official gold. However, the share of gold in official reserves in 2005 (10 percent) is much lower than in the early 1980s when gold accounted for about half of all official reserves. Most of the gold reserves (82 percent) are held by industrial countries, for which gold constituted 22 percent of their total reserves at the end of 2005. Gold reserves accounted for 3 percent of the total reserves of developing countries.

Developments during the first quarter of 2006

During the first quarter of 2006, total reserve assets rose by SDR 125 billion and foreign exchange reserves by SDR 96 billion. Reflecting the continued strength of gold price in the first quarter, the market value of gold reserves increased by SDR 39 billion, while holdings of IMF-related assets declined by SDR 9 billion.

Currency composition of foreign exchange reserves2

The currency composition of foreign exchange reserves has changed gradually over the past decade. The share of U.S. dollar holdings in foreign exchange reserves peaked at 71 percent over the 1999–2001 period (Table I.2), and declined to 67 percent in 2002, 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 two subsequent years, the dollar share remained at a similar level, as the quantity increase in dollar holdings offset the weakening of the U.S. dollar vis-à-vis other major currencies. In 2005, the share of dollar holdings increased slightly, reflecting the strengthening of the dollar vis-à-vis other reserve currencies (see the last paragraph for details).

Table I.2Share of national currencies in total identified official holdings of foreign exchange, end of year1(In percent)
1996199719981999200020012002200320042005
All countries
U.S. dollar62.165.269.471.071.071.467.065.965.866.5
Japanese yen6.75.86.26.46.15.14.43.93.83.6
Pound sterling2.72.62.72.92.82.72.82.83.43.7
Swiss franc0.30.30.30.20.30.30.40.20.20.1
Euro217.918.419.323.925.325.024.4
Deutsche mark14.714.513.8
French franc1.81.41.6
Netherlands guilder0.20.40.3
ECUs37.16.01.2
Other currencies44.33.84.51.61.51.21.51.91.81.6
Industrial countries
U.S. dollar57.459.167.673.572.572.768.970.571.573.7
Japanese yen5.75.96.96.76.55.64.43.83.63.3
Pound sterling2.12.02.12.22.01.92.11.51.92.1
Swiss franc0.10.10.20.10.20.30.60.20.10.1
Euro216.117.118.022.422.120.919.2
Deutsche mark15.916.213.4
French franc1.70.91.2
Netherlands guilder0.20.20.2
ECUs312.311.22.3
Other currencies44.74.46.21.41.61.51.71.92.01.6
Developing countries
U.S. dollar68.572.471.268.269.370.165.261.360.260.5
Japanese yen8.15.75.66.05.84.64.44.04.13.8
Pound sterling3.53.33.33.73.53.53.54.04.95.1
Swiss franc0.60.60.50.40.30.30.20.20.20.2
Euro19.919.820.625.428.529.028.8
Deutsche mark13.012.514.3
French franc2.02.12.1
Netherlands guilder0.30.50.4
ECUs30.00.00.00.00.00.00.00.00.00.0
Other currencies43.93.02.71.71.31.01.32.01.61.6
Memorandum items:
Unallocated reserves5
All countries21.821.322.122.921.823.825.526.529.632.6
Industrial countries2.22.11.11.10.40.40.40.30.30.5
Developing countries38.636.136.537.836.438.340.641.945.447.0
Note: Components may not sum to total because of rounding. Country coverage changes marginally every year, but the changes were larger than usual in 1996 (broader coverage) and in 2000 (narrower coverage). The data for 2005 are preliminary.

The currency shares are calculated for the reserves of member countries that report the currency composition of their foreign exchange reserves. The data include minimal estimation undertaken mainly for late reporters. Reserves for which currency composition is not reported are shown under “Unallocated reserves.”

Not comparable with the combined share of euro legacy currencies in previous years because it excludes 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.

Foreign exchange reserves of IMF member countries and the sum of the reserves that are reported to be held in currencies other than those listed above.

Foreign exchange reserves whose currency composition information is not submitted to the IMF, in percent of total official foreign exchange reserves held by each group of countries.

Note: Components may not sum to total because of rounding. Country coverage changes marginally every year, but the changes were larger than usual in 1996 (broader coverage) and in 2000 (narrower coverage). The data for 2005 are preliminary.

The currency shares are calculated for the reserves of member countries that report the currency composition of their foreign exchange reserves. The data include minimal estimation undertaken mainly for late reporters. Reserves for which currency composition is not reported are shown under “Unallocated reserves.”

Not comparable with the combined share of euro legacy currencies in previous years because it excludes 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.

Foreign exchange reserves of IMF member countries and the sum of the reserves that are reported to be held in currencies other than those listed above.

Foreign exchange reserves whose currency composition information is not submitted to the IMF, in percent of total official foreign exchange reserves held by each group of countries.

Table I.3Currency composition of official holdings of foreign exchange, end of year1(In millions of SDRs)
199719981999200020012002200320042005
U.S. dollar
Change in holdings85,75316,85480,421115,47562,331-5,105102,180132,099189,643
Quantity change49,03543,12964,55175,79331,68664,799186,807182,17790,490
Price change36,718-26,27515,87039,68230,645-69,903-84,626-50,07899,153
Year-end value614,331631,185711,606827,081889,412884,307986,4871,118,5871,308,229
Japanese yen
Change in holdings-2,7742,3737,1287,643-8,421-5,5381,4206,3045,100
Quantity change171-1,947-1,54712,352-1,674-6,4211417,3788,007
Price change-2,9454,3198,675-4,708-6,7478821,279-1,074-2,906
Year-end value54,46556,83863,96671,60963,18857,65059,07065,37470,474
Pound sterling
Change in holdings1,484-1034,7643,0601,6593,4334,26116,02616,227
Quantity change5498514,8613,8861,4102,4653,74814,40818,409
Price change934-954-97-8252499685131,618-2,182
Year-end value24,35124,24829,01332,07333,73237,16541,42657,45273,679
Swiss franc
Change in holdings710-278-7008283421,901-2,062-54128
Quantity change743-313-3887343081,400-2,162-671223
Price change-3335-3139434502100129-195
Year-end value3,2873,0092,3083,1373,4795,3803,3182,7772,805
Euro
Change in holdings44,303234,56225,76574,67663,50946,55554,518
Quantity change64,81738,32029,49848,28929,63033,06581,788
Price change-20,514-3,758-3,73326,38633,87913,490-27,270
Year-end value179,924214,486240,252314,927378,436424,991479,509
Deutsche mark
Change in holdings11,512-10,958
Quantity change21,123-14,619
Price change-9,6123,661
Year-end value136,631125,673
French franc
Change in holdings-2,1701,209
Quantity change-1,082881
Price change-1,088327--
Year-end value13,57414,782
Netherlands guilder
Change in holdings1,265-828
Quantity change1,447-944
Price change-182115
Year-end value3,3062,478
European currency unit
Change in holdings-3,245-46,128
Quantity change511-47,599
Price change-3,7551,472
Year-end value57,01810,890
Sum of the above3
Change in holdings92,536-37,859135,915161,56981,67669,367169,308200,443265,516
Quantity change72,498-20,560132,294131,08561,227110,532218,164236,358198,917
Price change20,038-17,3003,62130,48420,448-41,165-48,856-35,91566,599
Year-end value906,963869,104986,8171,148,3861,230,0621,299,4291,468,7371,669,1801,934,696
Other currencies
Change in holdings-1,4985,275-25,0141,275-1,5054,3628,9302,097542
Year-end value35,48040,75415,74017,01515,51019,87228,80230,89931,441
Total official holding4
Change in holdings108,672-30,334132,247191,241142,685138,380266,460375,826504,529
Year-end value1,197,8101,167,4761,299,7231,490,9641,633,6501,772,0302,038,4902,414,3162,918,845
Note: Components may not sum to total because of rounding. Country usage changes marginally every year, but the changes were larger than usual in 1996 (broader coverage) and in 2000 (narrower coverage). The data for 2005 are preliminary.

The currency composition of official foreign exchange reserves as reported by countries, including minimal estimation undertaken mainly for late reporters. 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.

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 “Unallocated reserves” whose currency composition could not be ascertained.

Note: Components may not sum to total because of rounding. Country usage changes marginally every year, but the changes were larger than usual in 1996 (broader coverage) and in 2000 (narrower coverage). The data for 2005 are preliminary.

The currency composition of official foreign exchange reserves as reported by countries, including minimal estimation undertaken mainly for late reporters. 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.

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 “Unallocated reserves” whose currency composition could not be ascertained.

The share of the euro, which replaced 11 European currencies and the European currency unit (ECU) on January 1, 1999, increased sharply between 1999 and 2003 and has since remained broadly stable at around 25 percent of total foreign exchange reserves. Given that at the introduction of the euro, the euro system’s reserves previously denominated in eurolegacy currencies3 became domestic assets of the euro area, the share of the euro in 1999–2005 is not directly comparable with the previous years’ combined share of the four eurolegacy 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–1996 to 4 percent at the end of 2005. The share of pound sterling reached nearly 4 percent at end–2005, while that of the Swiss franc remained well below 1 percent. The share of other 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 2005.

For industrial countries, the share of U.S. dollar holdings rose to 74 percent at the end of 2005, slightly exceeding the high value of 1999. The share of the euro in industrial countries’ foreign exchange reserves declined slightly to 19 percent in 2005, while the share of the yen decreased further to slightly over 3 percent in 2005. The shares of pound sterling and Swiss franc have remained broadly constant.

The share of the U.S. dollar in developing countries’ foreign exchange reserves remained close to 60 percent in 2005, lower than the average in preceding years.4 Holdings of the euro remain around 29 percent of those countries’ foreign exchange reserves, 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 gradually decreased by about 4 percentage points, to 4 percent at the end of 2005, while the share of pound sterling has increased by about 2 percentage points, to 5 percent in 2005. 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 190 billion in 2005, reflecting a quantity increase in U.S. dollar holdings of SDR 90 billion and a valuation increase of SDR 99 billion. Euro holdings increased by SDR 55 billion, as a quantity increase of SDR 82 billion was offset by a valuation decline of SDR 27 billion. Japanese yen holdings increased by SDR 5 billion as a quantity increase of SDR 8 billion was offset by a valuation decline of SDR 3 billion. Pound sterling holdings increased by SDR 16 billion whereas Swiss franc holdings remained broadly unchanged.

Official monetary authorities comprise central banks and also currency boards, exchange stabilization funds, and treasuries, to the extent that they perform monetary authorities’ functions.

In December 2005, the IMF began quarterly publication on its Web site of data on the currency composition of official foreign exchange reserves; see www.imf.org/external/np/sec/pr/2005/pr05284.htm.

Those foreign exchange reserves that, up to December 31, 1998, were denominated in euro area former national currencies and private ECUs.

This calculation does not include unallocated reserves, which account for nearly half of all official foreign exchange reserves held by developing countries.

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