World reserve currencies and the largest countries in terms of currency reserve amount

ranking 19/03/2019

The key element of financial stability and solvency of countries is their international reserves. Reserves are used as safety net during financial crises and warn investors of a level of investment protection in international transactions.

According to the strategy of the International Monetary Fund, international reserves of a country include: currency reserves, monetary gold, reserve position on the IMF (right of the country – member of the IMF on automatic unconditional borrowing in foreign currency within the limits of 25% from share of a country in the IMF) and special drawing rights, SDR (issued by the IMF international reserve assets, is the unit of account for the IMF).

Currency reserves make the most liquid part of international reserves. Absolute leader in terms of accumulated currency reserves, following the results of Q4 2018, is China - 3 488 billion USD (s. Table 1).

Russia takes 6-th place of the rating with 371 billion USD. Compared to the similar period of 2017 currency reserves of the RF have 7,4% increased.

Remarkably, comprehensive currency reserves of the euro-region countries make just 290 billion USD.

Tablenbsp;1. Top-10 countries with the largest currency reserves in the world
Country Currency reserves, the end of Q4 2018, billion USD Change to Q4 2017, %
1 China (including Hong Kong) 3 488 -1,9
2 Japan 1 209 0,6
3 Switzerland 739 -3,1
4 Saudi Arabia 486 0,0
5 The Republic of Korea 493 3,6
6 Russia 371 7,4
7 India 370 -4,0
8 Brasil 361 0,7
9 Singapore 285 2,7
10 Thailand 195 1,5
  Euro-region countries 290 7,9
Source: (International Monetary Fund, IMF), calculations made by Credinform

According to recent published by the IMF data on the end of Q3 2018, absolute volume of cumulated currency reserves in the world was valued at 11,4 trillion USD. US dollar continues to be main reserve currency – 6,6 trillion USD are kept in North American currency. (s. Picture 1).

Picture 1. Volume of main world currency reserves in terms of main currencies on the end of   Q3 2018, billion USD Picture 1. Volume of main world currency reserves in terms of main currencies on the end of Q3 2018, billion USD

At the same time, position of US dollar as leading reserve currency is weakening. On the basis of quarter dynamics of main currencies` deposit to world reserves, decrease in share of USD from 65,5% in Q1 2016 to 61,9% in Q3 2018 can be observed. Positions of Euro, Japanese yen and other currencies are increasing (s. Picture 2). How stable will be this tendency, it become clear in the next one – two years.

Picture 2. Quarterly dynamics of share of main currencies in the international reserves, % Picture 2. Quarterly dynamics of share of main currencies in the international reserves, %