NEW YORK, Jan. 1--World foreign exchange reserves exceeded $6 trillion (4.08 trillion euros) at the end the third quarter of 2007, with the amount held in dollars shrinking slightly, according to data released by the International Monetary Fund.
The data indicated that of the $3.8 trillion (2.58 trillion euros) in allocated reserves, about 63.8 percent was held in US dollars, down from 65 percent at the end of the second quarter this year, AP reported.
About 75.5 percent of total reserves are now in the coffers of governments of developing countries, the IMF said.
“While the percent of (allocated) reserves held in (dollar)-denominated assets fell to a record low 63.8 percent at end third-quarter 2007, it appears that decline is heavily influenced by the declining valuation of those assets as the dollar falls,È said an e-mail note from currency strategists at Bank of America Corp.
“Adjusting for currency movements suggests the decline in allocation to (dollar)-denominated assets has been relatively small this decade,“ the note stated.
The strategists also pointed out the increase in official holdings “has been dominated by the growth in reserves among developing countries, particularly in Asia.“
Since the fourth quarter of 2003, official holdings among industrialized countries have increased nearly 32 percent to about $350 billion (237.76 billion euros). However, official holdings among developing countries have increased $2.654 trillion (1.8 trillion euros), a 139 percent rise that has brought the percentage of total official reserves held by developing countries to over 75 percent, from just below 60 percent in early 2000, the strategists said.
“We continue to believe that fears about a massive ’dumping’ of dollar-denominated assets by official institutions is highly unlikely,“ the note said.
Source: Iran Daily