NEW YORK (Reuters) - U.S. dollar reserves held by global central banks were little changed in the second quarter from the prior quarter, data from the International Monetary Fund showed on Monday.
The dollar share of IMF reserves totaled $3.76 trillion in the second quarter from $3.766 trillion in the first quarter, according to the IMF, or about 61.9 percent of total reserves.
Global reserves are assets of central banks held in different currencies primarily used to back their liabilities. Central banks have sometimes cooperated in buying and selling official international reserves to influence exchange rates.
“The composition of foreign exchange reserves update reveals an expected trend,” said John Kicklighter, Chief Currency Strategist at DailyFX in New York. “Given the period of low general volatility during the second quarter, with a few hiccups, there is a natural inclination to diversify to a broader mix of currencies and assets to offer diversification and perhaps modestly higher returns.”
Euro reserves rose to US$1.446 trillion, or 23.8 percent of the total, in the second quarter from $1.431 trillion in the first quarter,
Since 2009, the euro’s share of reserve assets has mostly been declining on concerns about the region’s sovereign and economic crisis. At its peak in 2009, the euro’s share of reserves reached just under 28 percent.
The yen’s share fell to 3.8 percent in the second quarter from 3.9 percent in the prior quarter.
For only the second time the IMF broke down central bank holdings in the Australian and Canadian dollars, which were previously classified under “Other Currencies.”
Central banks held US$101 billion in the Australian currency globally as of the second quarter, up from US$98.5 billion in the first quarter.
They held US108.8 billion in Canadian dollars, up from USD94.9 billion in the first quarter.
The Australian and Canadian dollars have been in demand since the global financial crisis as relatively safe havens. The aussie in particular was highly desired given its yield though enthusiasm has cooled compared with the loonie, based on the COFER data.
”Perhaps the most impressive changes in the COFER data are with the Canadian and Australian exposure, said DailyFX’s Kicklighter. “Though relatively small, both continue to pull greater percentages of total reserves.”
The move by the IMF is part of a wider review to provide more transparency in global financial data. It is also a reflection of a growing trend by central banks around the world to diversify their holdings beyond the U.S. dollar, the euro and the yen.
Allocated reserves fell to $6.07 trillion in the second quarter, or 54.5 percent, from $6.08 trillion in the previous period.
Unallocated reserves, or those not known and believed mostly held by China, rose to $5.067 trillion in the second quarter from $5.007 trillion in the previous period.
Reporting by Nick Olivari. Editing by Andre Grenon and Leslie Gevirtz