Photo: the Dollar weakened in international reserves

The dollar’s share in global currency reserves fell to the lowest level since 1999, which strengthened the position of the Euro.

The dollar’s share in global currency reserves in 2018 dropped to 61.7 per cent − the lowest rate since the creation of the Euro zone. This is stated in the annual review of the international share of the Euro published by the European Central Bank (ECB) on June 13.

It is noted that the reduction was 7 percentage points in comparison with the maximum reached before the global financial crisis.

As stressed by the ECB, the dollar remains the leading reserve currency. The share of international reserves denominated in euros last year increased by more than 1 p. p. to 20.7%.

As explained in the ECB, the Euro is punishing the dollar for several reasons. Among them, increased market volatility and reversal of capital flows, as several developing countries have sold dollar-denominated foreign exchange reserves to stabilize the exchange rates of national currencies. This is an automatically strengthened the share of the Euro.

In addition, some Central banks, particularly the Bank of Russia began to diversify portfolios because of fears of the imposition of unilateral sanctions, increasing the share of the Euro in international reserves by about 0.5 PP.

Earlier it was reported that by the end of may the international reserves of Ukraine decreased by 5.5% due to repayments on the public debt, and on June 1, amounted to 19.4 billion dollars.

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