U.S. Markets

U.S. dollar share of global currency reserves rises in fourth quarter: IMF

FILE PHOTO: U.S. dollar notes are seen in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) - The dollar’s share of currency reserves reported to the International Monetary Fund rose in the fourth quarter, snapping three straight quarterly declines, as the absolute level of reserves held in greenbacks hit a record, data released on Friday showed.

The dollar’s share of allocated currency reserves, or those reported to the IMF, rose to a record $5.05 trillion in the October-December period, or nearly 64 percent, according to the data. That was up from the third quarter, when the dollar’s share hit its lowest in two years at $4.94 trillion, or 63.3 percent.

Meanwhile, China’s share of allocated currency reserves, reported by the IMF for the first time, totaled just over 1 percent, or $84.51 billion.

The euro’s share fell to 19.7 percent to mark its lowest in a year, from 20.2 percent in the third quarter, while the yen fell to 4.2 percent in the fourth quarter from 4.4 percent in the third quarter. The yen’s latest share of currency reserves was the lowest since the first quarter of 2016.

Total foreign exchange reserves worldwide fell to $10.8 trillion from $11.06 trillion in the third quarter, according to the IMF data. The total amount of allocated currency holdings rose to $7.9 trillion from $7.8 trillion previously.

The dollar’s value has surged since Donald Trump’s victory in the Nov. 8 U.S. presidential election, which led investors to expect U.S. inflation will accelerate.

The dollar index .DXY, which measures the greenback against a basket of six major rivals, rallied 7.1 percent in the fourth quarter to notch its strongest showing since the first quarter of 2015.

Reporting by Dan Burns and Sam Forgione; Editing by Chizu Nomiyama and Jeffrey Benkoe