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Tag Archives: Foreign Exchange Reserves

Chart of the WeekUS Dollar Share of Global Foreign Exchange Reserves Drops to 25-Year Low

By Serkan Arslanalp and Chima Simpson-Bell عربي, 中文, Español, Português, Русский The share of US dollar reserves held by central banks fell to 59 percent—its lowest level in 25 years—during the fourth quarter of 2020, according to the IMF’s Currency Composition of Official Foreign Exchange Reserves (COFER) survey. Some analysts say this partly reflects the declining role of the US dollar in the global economy, in the face of competition from other currencies used by central banks for...

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Glaciers of Global Finance: The Currency Composition of Central Banks’ Reserve Holdings

By Alina Iancu, Neil Meads, Martin Mühleisen, Yiqun Wu  Español, 中文, Français, 日本語, Русский  The currencies that are being held by central banks as foreign exchange reserves have remained largely steady over decades. Changes in the composition of these holdings can, at best, be described as glacial in pace. But geopolitical shifts and technological revolutions are reshaping the global economy and the international use of currencies. These forces, and the fallout from the COVID-19 pandemic,...

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The Economic Scars of Crises and Recessions

By Valerie Cerra and Sweta C. Saxena March 21, 2018 New study finds that all types of recessions lead to permanent losses in output and welfare (photo: Peshkov/iStock by GettyImages). Economic recessions are typically described as short-term periods of negative economic growth. According to the traditional business cycle view, output moves up and down around its long-term upward trend and after a recession, it recovers to its pre-recession trend. Our new study casts doubt on this...

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A Common Cause for Sustainable Growth and Stability in Central Africa

By Abebe Aemro Selassie August 1, 2017 Version in Español (Spanish) Woman with a machete in Bafut, Cameroon: Six countries in Central Africa have a strategy to turn their economies around, with help from the IMF (photo: Heiner Heine/imageBroker/Newscom) Six countries in central Africa have been hit hard by the collapse in commodity prices. Oil prices dropped, economic growth stalled, public debt rose, and foreign exchange reserves declined. A delayed response from policymakers, and...

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A Problem Emerges: Central Banks Injected A Record $1 Trillion In 2017… It’s Not Enough

 Two weeks ago Bank of America caused a stir when it calculated that central banks (mostly the ECB & BoJ) have bought $1 trillion of financial assets just in the first four months of 2017, which amounts to $3.6 trillion annualized, “the largest CB buying on record.”  Aggregate Balance Sheet Of Large Central Banks, 2000 - 2017 - Click to enlarge BofA’s Michael Hartnett noted that supersized central bank...

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SNB Spent $68 Billion On Currency Manipulation In 2016

While Donald Trump has repeatedly expressed his displeasure with China for manipulating its currency, he appears to have recently figured out that over the past 2 years Beijing has been spending hundreds of billions in dollar to strengthen, not weaken, the Yuan and to halt the ~$1 trillion in capital flight from China. But while everyone knows that the biggest currency manipulation in the world, and perhaps the Milky...

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Revisiting the Paradox of Capital: The Reversal of Uphill Flows

By Emine Boz, Luis Cubeddu, and Maurice Obstfeld Basic economic theory tells us that capital should flow from slow-growing rich countries to faster-growing poor ones in search of higher returns. A decade ago, our former Research Department colleagues Eswar Prasad, Raghuram Rajan, and Arvind Subramanian examined why the reverse had been true—capital generally flowed “uphill” from poorer to richer countries. Building on the seminal work of Robert Lucas, they argued that certain characteristics...

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80 percent Of Central Banks Plan To Buy More Stocks

Regular readers remember how, when we first reported around the time of our launch eight years ago that central banks buy stocks, intervene and prop up markets, and generally manipulate equities in order to maintain confidence in a collapsing system, and avoid a liquidation panic and bank runs, it was branded “fake news” by the established financial “kommentariat.” What a difference eight years makes, because today none...

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