The U.S. dollar’s share of currency reserves reported to the International Monetary Fund edged up to 59.5% in the first quarter of the year, from 58.9% in the previous quarter, IMF data showed on Wednesday.
The greenback remains the largest-held currency reserve by global central banks.
Global reserves, which are reported in U.S. dollars, are assets of central banks held in different currencies used primarily to support their liabilities. Central banks sometimes use reserves to help support their respective currencies.
“Given the U.S. dollar’s broader gains through Q1, the rise in U.S. dollar’s holdings may be more apparent than real,” wrote Shaun Osborne, chief FX strategist, at Scotiabank in Toronto, in a research note after the release of the IMF data.
The dollar index gained 3.6% in the first quarter.
“Broader trends do underscore the gradual shift away from the U.S. dollar in reserve holdings,” he added.
The peak allocation for the U.S. dollar was 72.7% in Q2 2001, according to the IMF data, and while currency diversification has developed at a gradual pace, the trend has been persistent, Osborne said.
