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Central banks are reassessing foreign exchange reserves
The International Monetary Fund’s Currency Composition of Foreign Exchange Reserves data for the third quarter of 2022 has revealed another drop in global foreign exchange reserves. The headline number declined by around $500bn in the quarter, taking the cumulative decline to almost $1.5tn since Q3 2021. It is important to note that during the third quarter the dollar appreciated by around 5% on a trade-weighted basis. Since non-dollar reserves are converted to a dollar value for the purpose of the IMF report, that would have been a substantial headwind. Last year was truly unusual because Russian reserves were ... (full story)