Standard Chartered: Reserve Managers Appear to Be Deliberately Increasing Dollar Holdings

According to a report by Jinse Finance, claims about the end of the US dollar’s status as the world’s reserve currency may not be accurate. Data from the International Monetary Fund (IMF) for the first quarter shows that global foreign exchange reserves increased by $168 billion, with 54% held in US dollars. Steve Englander, Global Head of FX Research at Standard Chartered Bank, noted that during periods of pressure in the past, reserve managers appeared to deliberately increase their holdings of US dollars to prevent their own currencies from appreciating too sharply. Reserve managers may buy dollars when they are relatively cheap, and, anticipating future market volatility, believe it is necessary to accumulate dollar reserves in advance. (Jin10)