Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Dollar’s Share of Global Currency Reserves at 6-Year Low; Yuan’s Share Biggest Ever

  by    0   2

The percentage of US dollars held as currency reserves globally dropped to the lowest level in nearly six years in the second quarter of 2019 according to the latest IMF data. Meanwhile, Chinese yuan made up the biggest percentage of reserves ever.

The dollar’s shrinking share of global reserves comes as countries like Russia and China move toward de-dollarization in an effort to undermine the ability of the US to weaponize the dollar as a foreign policy tool. The global gold rush on the part of central banks is part of this movement.

Reserves held in dollars globally totaled $6.79 trillion in the second quarter. That represented 61.63% of allocated reserves. This compares with $6.74 trillion, or 61.86%, in the first quarter of the year. It was the lowest percentage of dollars held as a reserve currency since Q4 2013.

The share of Japanese yen, euros and Chinese yuan all increased in Q2.

In fact, the share of yuan held by central banks rose to 1.97%. That is the highest level since the IMF began reporting its share of central bank holdings in 2016.

Many central banks are also replacing dollars with gold. Through the first half of 2019, a dozen central banks had increased their gold reserves by at least 1 ton. Central bank gold purchases this year continue a trend we saw through 2018. In total, the world’s central banks accumulated 651.5 tons of gold last year. The World Gold Council noted that 2018 marked the highest level of annual net central bank gold purchases since the suspension of dollar convertibility into gold in 1971, and the second-highest annual total on record.

Russia has led the way in accumulating gold. The Central Bank of Russia has added around 106 tons of gold to its reserves this year. Meanwhile, Russia almost completely divested itself of US Treasuries last year. According to Bank of America analysts,  the amount of US dollars in Russian reserves fell from 46% to 22% in 2018. Russias gold bet has been paying off. The country’s gold reserves topped $100 billion last month.

The US dollar remains the dominant reserve currency, but there is a clear movement toward de-dollarization. And it’s not just countries like Russia and China moving away from dollars. Even Europe has joined the de-dollarization party.

Peter Schiff has talked about central bank gold-buying and the move away from the greenback. He has noted that the US went off the gold standard in 1971, but he thinks the world is going to go back on it.

The days where the dollar is the reserve currency are numbered and we’re going back to basics. You know, everything old is new again. Gold was money in the past and it will be money again in the future, and central banks that are smart enough to read that writing on the wall are increasing their gold reserves now.”

Download SchiffGold's Gold vs GLD EFT's Guide Today

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

JP Morgan Chase CEO Worried About Higher Than Expected Inflation

With CPI data once again coming in hotter than expected, it’s getting harder and harder for the mainstream to swallow the “transitory inflation” narrative. And some people are starting to worry. During an earnings call, JPMorgan Chase CEO Jamie Dimon expressed concerns about higher than expected and persistent inflation ahead.

READ MORE →

American Consumers Continue to Run up Credit Card Debt

Consumer borrowing has slowed somewhat from the record level we saw in June, but Americans continue to pile on the debt. Consumer debt grew by $14.4 billion in August to $4.35 trillion, according to the latest data from the Federal Reserve. That represents a 4% increase. This follows on the heels of a 4.8% increase in […]

READ MORE →

Demand for Silver in Electronics Sector Projected to Surge

The demand for silver is expected to expand along with the continued growth in global connectivity. According to a report released by the Silver Institute, silver demand in electronics and electrical applications is projected to rise by 10% by 2025.

READ MORE →

Inflation Bites! Rising Prices Are Eating Up Personal Income Gains

Inflation bites! Personal income rose again in August, but once again rising prices ate up all the gains and then some.

READ MORE →

Central Banks Added Nearly 30 Tons of Gold to Holdings in August

Central banks continue to add gold to their reserves.  Global central bank reserves increased by a net 28.4 tons in August, according to data compiled by the World Gold Council. Gross central bank gold purchases came in at 30 tons.

READ MORE →

Comments are closed.

Call Now