The Currency Composition of Foreign Exchange Reserves: Retrospect and Prospect

35 Pages Posted: 2 Feb 2006

See all articles by Barry Eichengreen

Barry Eichengreen

University of California, Berkeley; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Donald J. Mathieson

International Monetary Fund (IMF)

Date Written: July 2000

Abstract

This paper examines the determinants of the currency composition of international reserves. Our single most important finding is the striking stability over time of the relationship between the demand for reserves denominated in different currencies and its principal determinants: trade flows, financial flows and currency pegs. This result contrasts sharply with recent predictions of sharp shifts in the currency composition of central banks` holdings of foreign exchange. The message would seem to be that in this, as in other respects, the international monetary system is in a mode of gradual, continuous evolution, not of rapid, discontinuous change.

Keywords: International reserves, currency composition

JEL Classification: F3, F31, F33

Suggested Citation

Eichengreen, Barry and Mathieson, Donald J., The Currency Composition of Foreign Exchange Reserves: Retrospect and Prospect (July 2000). IMF Working Paper, Vol. , pp. 1-35, 2000. Available at SSRN: https://ssrn.com/abstract=879903

Barry Eichengreen (Contact Author)

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Donald J. Mathieson

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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