US dollar’s share of global reserves keeps decreasing

The share of the dollar in global central bank reserves continued to decline in the third quarter of this year

According to data issued by the International Monetary Fund, the dollar represented 59.2% of global central bank reserves in the last quarter, compared to 59.4% in the second quarter, and these levels are the lowest since the fourth quarter of last year.

Despite this, the green card still has the largest share in global reserves, by a large margin from its closest competitors, as the euro’s share reached levels of 19.6% after its share witnessed a slight decline of about 0.1% in the third quarter.

On the other hand, the Japanese yen’s share grew by about 0.2% to 5.5% over the same period.

The position of the dollar has become less dominant in the long term, as although the share of the US currency has remained hovering around 59% levels in recent years, it is a lower level than more than 60% a decade ago, and 70% in 2000. ‎

On the other hand, currencies competing with the dollar, such as the yuan, have begun to gradually reduce the dominance of the green paper, as Beijing seeks to escalate its currency to become an international alternative.

Although the yuan’s share in global reserves remains stable, its use in payments has increased

The yuan’s share in international payments rose to a record level, becoming the fourth most used currency last month, according to data from the SWIFT financial system.

Western sanctions on Russia due to its war with Ukraine also helped push many countries to reduce their exposure to any action related to the US currency.

In a separate context, the US dollar recorded its first annual losses since 2020 this year, with markets awaiting the Federal Reserve ending its current policy of monetary tightening.