News Note: US Dollar Share of Global Currency Reserves Falls Slightly

For some time, many have been predicting that the US dollar will lose its place as the worlds global reserve currency. Also, for many years now, Russia and China have clearly been working to try and find ways to bypass use of the US dollar. Recently, sanctions imposed by the US has added some incentive for other nations to continue to pursue this goal.

This new end of 2018 Reuters article notes that despite all of the above, the US dollar remains firmly positioned as the world's global reserve currency despite falling slightly in its allocated share against the Euro and the Yen. The Yuan has made virtually no progress in its allocated share of global reserves. Below are a couple of excerpts and then a few added comments.

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"Reserves held in U.S. dollars rose to $6.63 trillion, or 61.94 percent of allocated reserves, in the third quarter, from $6.56 trillion, or 62.4 percent, in the second quarter. The share of allocated U.S. dollar reserves declined to its smallest since the 61.27 percent in the fourth quarter of 2013, IMF data showed."

. . . . .

"Ranked second behind the greenback, the euro’s share of global reserves climbed to 20.48 percent, its biggest since the fourth quarter of 2014. It was 20.25 percent in the quarter before."

. . . . 

"The share of allocated currency reserves held in yuan, also known as renminbi, slipped to 1.80 percent in the third quarter from 1.84 percent in the prior quarter."

Click here to read the full article on Reuters

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My added comments: The headline on this article states the share of US dollar as global reserves is near a five year low, so the dollar is gradually losing a bit of global share. However, the year to year changes are still very small overall and the share of US dollar reserves is actually a bit higher now than at the end of 2013 five years ago. 

This is why we have said here that we expect very gradual changes to take place without some kind of new major global crisis. The status quo is very entrenched and it appears that only something that completely disrupts the existing monetary system would speed up the pace of change. We watch for such events and will report them if they do emerge.