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The Currency Composition of Foreign Exchange Reserves: Retrospect and Prospect
Author:
Mr. Barry J. Eichengreen null

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Mr. Donald J Mathieson
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Series:
IMF Working Papers
Volume/Issue:
Volume 2000: Issue 131
Language:
English
Publication Date:
01 Jul 2000
DOI:
https://doi.org/10.5089/9781451855272.001
ISBN:
9781451855272
ISSN:
1018-5941
Pages:
34
Keywords:
WP; currency; break; currency composition; reserve; International reserves; composition of reserve; currency peg; currency share; composition change; EMU currency holding; unspecified currency; dollar peg; Currencies; Reserve currencies; International monetary system; International capital markets; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper examines the determinants of the currency composition of international reserves. Our single most important finding is the striking stability over time of the relationship between the demand for reserves denominated in different currencies and its principal determinants: trade flows, financial flows and currency pegs. This result contrasts sharply with recent predictions of sharp shifts in the currency composition of central banks’ holdings of foreign exchange. The message would seem to be that in this, as in other respects, the international monetary system is in a mode of gradual, continuous evolution, not of rapid, discontinuous change.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund