The share of the US DOLLAR in the reserve currencies of the world's central banks continues to decline. According to the latest data released by the International Monetary Fund (IMF), the share of the dollar fell to 59.2 per cent in the third quarter of 2023. The decline comes in the wake of global dollar-denominated transactions.
According to the International Monetary Fund, the dollar accounted for about 70% of the world's reserve funds in 2000. The Dollar remains the main reserve currency. And then there's the Euro. The euro also fell to 19.6 per cent. The share of the Japanese YEN rose to 5.5 percent in the third quarter from 5.3 percent in the previous quarter. There was little change in the value of the Chinese YUAN, British POUND, Canadian DOLLAR and Swiss FRANC.
The Chinese Yuan's share of the most used currencies in international payments jumped to fourth place in November, according to data collected by global financial messaging service SWIFT. Also, lending in Yuan to different countries has also increased. The People's Bank of China has signed 30 bilateral currency agreements with foreign central banks, including Saudi Arabia and Argentina. The increase in the Yuan's share of international remittances indicates China's shift away from the Dollar and China's drive to increase the use of the Yuan.
The use of national currencies instead of the Dollar in international trade has gained momentum in the past year. The expulsion of Russia from the Western financial system and the freezing of foreign funds in Russia have led to an increase in the use of the national currency in foreign trade payments. The European Bank for Reconstruction and Development (EBRD) has warned that an increase in Russia's trade in the Chinese Yuan in response to Western measures could lead to a weakening of the US Dollar. Economists say that the increased use of the Chinese Yuan due to Western sanctions on Russia's international trade will lead to a loss of the Dollar.
