Friday, Dec 30, 2011
NEW YORK (Dow Jones)--Central banks across the world increased their share of dollar-denominated holdings in the third quarter, data from the International Monetary Fund showed, as they simultaneously lightened their share of euros.
Despite continuing concerns about the U.S.'s massive fiscal imbalance that led to the world's largest economy being stripped of its triple-A credit rating, the data underscored how the dollar remained the reserve currency of choice among global central banks.
The fund's quarterly Currency Composition of Official Foreign Exchange Reserves showed that total foreign exchange holdings rose to $10.17 trillion last quarter, up from $10.08 trillion at the end of the first half of 2011. During the third quarter, the greenback comprised $3.36 trillion of FX reserves, a nearly 2% increase from the prior quarter. Year-over-year, the dollar's share of total reserves surged 7.5% from the comparable quarter in 2010.
A reduction in the size of euro-denominated holdings coincided with Europe's debt crisis hitting a crescendo. The COFER data showed central banks trimming their euros to $1.4 trillion in the third quarter, from $1.45 trillion in the prior quarter.
-By Javier E. David, Dow Jones Newswires; 212-416-4564; javier.david@dowjones.com
(END) Dow Jones Newswires
December 30, 2011 10:33 ET (15:33 GMT)
