My post at The Long Room, Financial Times Alphaville
Data on the composition
of foreign exchange reserves by central banks is unfortunately getting less
transparent.
As the recently
released COFER
statistics show, an increasing proportion of international reserves holdings are reported
as unallocated - (i.e. central banks chose not to deliver information on
individual currency composition but only aggregate figures).
Consequently, we can
only know the currency composition for 52.6% of the world´s international
reserves, down from 55.8% in 2012 and well below 78.4% in 2000.
Reported currency composition and total international
reserves
WORLD
|
Q3 2012
|
Q3 2013
|
Q3 2014
|
Change 2012-14
|
|
Allocated
|
6019
|
6192
|
6185
|
||
Unallocated
|
4767
|
5249
|
5584
|
||
Total
|
10786
|
11441
|
11769
|
9,1%
|
|
% reported
|
55,8%
|
54,1%
|
52,6%
|
-3,2
|
|
EMERGING AND
DEVELOPING COUNTRIES
|
|||||
Allocated
|
2765
|
2836
|
2772
|
||
Unallocated
|
4366
|
4834
|
5157
|
||
Total
|
7131
|
7670
|
7929
|
11,2%
|
|
% reported
|
38,8%
|
37,0%
|
35,0%
|
-3,8
|
|
ADVANCED COUNTRIES
|
|||||
Allocated
|
3253
|
3356
|
3413
|
||
Unallocated
|
401
|
414
|
427
|
||
Total
|
3654
|
3770
|
3840
|
5,1%
|
|
% reported
|
89,0%
|
89,0%
|
88,9%
|
-0,1
|
|
Source: IMF
Unallocated reserves are mostly of emerging and developing countries origin. Since reserves grew the most at these countries, any persuasion effort towards more transparency should focus on them.
It is worthwhile to recall
that transparency on foreign exchange reserves information is essential for
keeping a sound sovereign credit standard. In particular, currency diversification
is an important piece for any financial risk assessment. Currency risk
opacity would do nothing to help a country´s credit worthiness.
A more active of the
IMF in persuading country members to improve transparency and follow best practices on
this matter would be needed.
