Chapter

Appendix I. International Reserves

Author(s):
International Monetary Fund
Published Date:
September 1999
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Total international reserves remained essentially unchanged in 1998 relative to the previous year—at SDR 1.4 trillion (Table I.I). Nongold reserves, which consist of foreign exchange reserves and IMF-related assets, fell by SDR 10 billion (1 percent) and stood at SDR 1.24 trillion at the end of the year. Foreign exchange reserves declined by 2 percent to SDR 1.16 trillion, while IMF-related assets increased by 20 percent to SDR 81 billion. The market value of gold reserves held by monetary authorities increased by 3 percent to SDR 197 billion at the end of 1998.1

Table I.1Official Holdings of Reserve Assets, 1993–March 19991(In billions of SDRs)
199319941995199619971998March

1999
All countries
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF32.831.736.738.047.160.663.2
SDRs14.615.819.818.520.520.415.4
Subtotal, IMF-related assets47.447.556.456.567.681.078.6
Foreign exchange750.2811.3931.71,080.21,185.11,161.41,116.2
Total reserves excluding gold797.6858.7988.11,136.71,252.61,242.31,194.8
Gold2
Quantity (millions of troy ounces)923.1919.0909.8907.6890.3965.3935.5
Value at London market price262.5241.3236.7233.0191.5197.3192.5
Total reserves including gold1,060.11,100.01,224.81,369.71,444.11,439.61,387.4
Industrial countries
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF28.327.431.632.641.353.954.4
SDRs11.512.515.014.515.515.812.0
Subtotal, IMF-related assets39.839.946.647.156.869.866.4
Foreign exchange373.7393.9441.1501.7520.9483.0432.5
Total reserves excluding gold413.4433.8487.7548.8577.7552.8498.9
Gold2
Quantity (millions of troy ounces)770.8768.0755.0748.2732.5809.0791.4
Value at London market price219.2201.6196.4192.1157.5165.4162.9
Total reserves including gold632.7635.5684.1740.9735.2718.1661.7
Developing countries
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF4.54.35.05.45.76.78.8
SDRs3.23.34.84.05.04.53.4
Subtotal, IMF-related assets7.77.69.89.410.811.212.2
Foreign exchange376.5417.3490.6578.5664.2678.4683.8
Total reserves excluding gold384.2424.9500.4587.9674.9689.6696.0
Gold2
Quantity (millions of troy ounces)152.3151.0154.8159.4157.8156.3144.2
Value at London market price43.339.640.340.933.932.029.7
Total reserves including gold427.5464.6540.7628.8708.9721.5725.6
Net debtors
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF2.72.93.53.94.25.06.5
SDRs2.32.43.82.93.93.32.7
Subtotal, IMF-related assets5.05.27.36.98.18.49.3
Foreign exchange264.8299.1367.4447.9532.0543.8548.3
Total reserves excluding gold269.8304.4374.8454.7540.1552.0557.6
Gold2
Quantity (millions of troy ounces)126.0124.8129.1133.7132.4130.9118.7
Value at London market price35.832.833.634.328.526.824.4
Total reserves including gold305.7337.1408.4489.1568.6578.8582.0
Countries without debt-servicing problems
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF2.32.43.13.53.84.65.7
SDRs1.21.32.81.83.02.62.3
Subtotal, IMF-related assets3.53.75.95.36.87.28.0
Foreign exchange186.9214.0272.6327.0400.7424.5434.7
Total reserves excluding gold190.4217.7278.4332.3407.4431.7442.7
Gold2
Quantity (millions of troy ounces)79.678.180.884.687.285.773.6
Value at London market price22.620.521.021.718.817.515.2
Total reserves including gold213.1238.2299.5354.0426.1449.2457.9
Note: Components may not sum to totals because of rounding.Source: International Monetary Fund, International Financial Statistics.

End-of-year figures for all years except 1999. “IMF-related assets” comprise reserve positions in the IMF and SDR holdings of all IMF members. The entries under “Foreign exchange” and “Gold” comprise official holdings of those IMF members for which data are available and certain other countries or areas.

One troy ounce equals 31.103 grams. The market price is the afternoon price fixed in London on the last business day of each period.

Note: Components may not sum to totals because of rounding.Source: International Monetary Fund, International Financial Statistics.

End-of-year figures for all years except 1999. “IMF-related assets” comprise reserve positions in the IMF and SDR holdings of all IMF members. The entries under “Foreign exchange” and “Gold” comprise official holdings of those IMF members for which data are available and certain other countries or areas.

One troy ounce equals 31.103 grams. The market price is the afternoon price fixed in London on the last business day of each period.

Foreign Exchange Reserves

Foreign exchange reserves constitute the main component of reserve assets, accounting for 94 percent of nongold assets. Total foreign exchange reserves declined by 2 percent during 1998, following annual increases of about 10 to 15 percent over the previous five years. Foreign exchange reserves of industrial countries declined by 7 percent in 1998, while those of developing countries increased by 2 percent. Developing countries have steadily increased their share of foreign exchange holdings, and at the end of 1998, they held 58 percent of total foreign exchange reserves. Developing countries without debt-servicing problems increased their foreign exchange reserves by 6 percent to SDR 425 billion. In contrast, foreign exchange reserves of countries with debt-servicing problems declined by 9 percent, following annual increases of 10 to 25 percent during the 1990s.

Holdings of IMF-Related Assets

IMF-related assets represent 7 percent of total reserve assets. During 1998, IMF-related assets increased by 20 percent to SDR 81 billion. Members’ reserve positions in the IMF, which comprise their reserve tranche and creditor positions, increased in 1998 by 29 percent (SDR 14 billion), following a 24 percent increase in 1997. The high rates of increase of these reserve assets during these two years reflect increases in industrial countries’ reserve positions in the IMF associated with purchases of their currencies by certain member countries experiencing balance of payments difficulties.

Holdings of SDRs by IMF member countries during 1998 remained essentially unchanged from the previous year at SDR 20.4 billion. Of the total allocation of 21.4 billion SDRs, the IMF holds SDR 687 million and other prescribed institutions hold the remaining SDR 455 million.

Gold Reserves

The market value of gold reserves held by monetary authorities increased by 3 percent to SDR 197 billion at the end of 1998. During 1998, the SDR market price of gold fell by 5 percent, while the physical stock of gold reserves increased by 8 percent. This increase in the stock of gold mainly reflects the return of the gold portion of the European currency unit (ecu) reserves by the new European Central Bank to the central banks of the 11 countries participating in the first round of European Economic and Monetary Union (EMU). The share of gold reserves in total reserves has declined gradually to 14 percent at the end of 1998 from about 50 percent in the early 1980s. Gold reserves represent 23 percent of total reserves for industrial countries and less than 5 percent of total reserves for developing countries. Industrial countries hold 84 percent of all gold reserves.

Developments in the First Quarter of 1999

Holdings of reserve assets declined by SDR 52 billion (4 percent) during the first quarter of 1999. Total reserves of industrial countries declined by 8 percent (SDR 56 billion), while those of developing countries increased by 1 percent. These changes are attributable mainly to changes in foreign exchange reserves. IMF-related assets fell by 3 percent. The sharp decline of SDR 5 billion (25 percent) in the SDR component of IMF-related assets in the first quarter of 1999 reflects quota payments made by member countries, following the quota increase that was approved in early 1999. The market value of gold reserves declined by 2 percent.

Currency Composition of Foreign Exchange Reserves

The degree of diversification in the currency composition of foreign exchange reserves has not changed significantly over the past decade (Table I.2). The U.S. dollar remains the dominant international reserve currency. The share of the U.S. dollar in total foreign exchange reserves declined during the 1980s, but, after reaching a low of 48 percent in 1990, gradually rebounded to 60 percent by 1998. The shares of the deutsche mark and the Japanese yen peaked around 1990 and declined to 12 percent and 5 percent, respectively, by the end of 1998. Following a similar pattern, the shares of the French franc, the Swiss franc, and the Dutch guilder peaked around 1990 and have declined gradually since then. By contrast, the share of the pound sterling increased by about 1 percentage point during the 1990s.

Table I.2Share of National Currencies in Total Identified Official Holdings of Foreign Exchange, End of Year 1989–981(In percent)
1989199019911992199319941995199619971998
All countries
U.S. dollar51.347.848.351.953.053.054.056.957.160.3
Pound sterling2.32.83.12.92.83.13.03.23.33.9
Deutsche mark17.816.515.113.013.413.813.212.512.312.1
French franc1.42.22.72.42.12.32.21.71.31.3
Swiss franc1.41.21.11.01.10.90.70.70.60.7
Netherlands guilder1.11.01.00.60.60.50.40.30.40.4
Japanese yen7.27.78.37.37.37.56.25.54.85.1
Ecu10.89.710.29.78.27.76.85.95.10.8
Unspecified currencies26.711.110.211.311.611.313.513.215.115.5
Industrial countries
U.S. dollar47.944.943.148.449.950.851.856.157.964.3
Pound sterling1.11.41.62.22.02.32.12.01.93.1
Deutsche mark20.419.418.014.916.216.316.415.615.914.7
French franc1.12.33.02.82.52.42.31.70.91.4
Swiss franc1.10.90.80.40.30.20.10.10.10.2
Netherlands guilder1.11.11.10.40.40.30.20.20.20.3
Japanese yen7.48.59.57.57.78.26.65.65.77.0
Ecu15.314.516.616.715.214.613.412.010.91.8
Unspecified currencies24.56.96.36.75.85.07.06.76.47.3
Developing countries
U.S. dollar59.653.756.456.756.755.556.157.756.557.1
Pound sterling5.35.55.33.83.64.04.04.44.54.6
Deutsche mark11.410.410.510.310.010.99.99.69.310.1
French franc2.12.12.21.91.72.22.01.81.61.2
Swiss franc2.21.81.81.82.01.61.31.21.01.0
Netherlands guilder0.90.80.90.90.80.70.50.50.50.4
Japanese yen6.66.06.47.16.86.75.75.44.03.7
Ecu
Unspecified currencies312.019.816.517.618.518.320.319.422.721.9
Note: Components may not sum to total because of rounding.

Note that ecus are treated as a separate currency. Only IMF member countries that report their official holdings of foreign exchange are included in this table.

The residual is equal to the difference between total foreign exchange reserves of IMF member countries and the sum of the reserves held in the currencies listed in the table.

The calculations here rely to a greater extent on IMF staff estimates than do those provided for the group of industrial countries.

Note: Components may not sum to total because of rounding.

Note that ecus are treated as a separate currency. Only IMF member countries that report their official holdings of foreign exchange are included in this table.

The residual is equal to the difference between total foreign exchange reserves of IMF member countries and the sum of the reserves held in the currencies listed in the table.

The calculations here rely to a greater extent on IMF staff estimates than do those provided for the group of industrial countries.

In the calculation of currency shares in Table I.2, the ecu is treated as a separate currency. Official ecu reserves existed in the form of claims on both the private sector and on the European Monetary Institute (EMI). The ecu reserves that represented claims on the EMI had been issued in exchange for deposits equal to 20 percent of both dollar and gold reserves. In December 1998, prior to the start of Stage Three of EMU and the creation of the euro, the gold and dollar reserves swapped for ecus were returned to the central banks of EMU countries by the European Central Bank, the successor to the EMI. Hence, the share of ecus in total official foreign exchange reserves fell sharply at the end of 1998. The remaining component of ecu foreign exchange reserves consists of official claims on the private sector, usually in the form of ecu deposits and bonds.2

The share of unspecified currencies, which includes currencies other than those discussed above as well as foreign exchange reserves for which no information on the currency composition is available, increased significantly through the 1990s. This mainly reflects data problems since many transition economies that have become IMF members in recent years report only their total holdings of foreign exchange reserves but do not provide information on the currency composition of their reserves. The share of unspecified currencies stood at 16 percent in 1998 (indicating that the evolution of currency shares discussed here should be interpreted with considerable caution, especially for developing countries).

For industrial countries, the share of the U.S. dollar in foreign exchange reserves increased by 6 percentage points at the end of 1998, with a concomitant decline in the share of ecu holdings. For developing countries, the U.S. dollar portion of foreign exchange has remained around 57 percent since 1991. Unspecified currencies accounted for 22 percent of developing countries’ foreign exchange reserves in 1998.

Changes in the SDR value of foreign exchange reserves can be decomposed into quantity and valuation (price) changes for each of the major currencies as well as the ecu (Table I.3). In 1998, total official foreign exchange reserves in major identifiable currencies decreased by SDR 26 billion, reflecting a quantity decrease of SDR 6 billion and a decrease of SDR 19 billion in the valuation of these reserves in SDR terms.

Table I.3Currency Composition of Official Holdings of Foreign Exchange, End of Year 1990–981(In millions of SDRs)
199019911992199319941995199619971998
U.S. dollar
Change in holdings16,36316,22034,28047,19431,26373,344110,30261,61519,189
Quantity change36,67118,53922,41045,84254,38577,88693,39022,01046,855
Price change–20,308–2,31911,8691,353–23,122–4,54216,91239,606–27,666
Year-end value267,669283,889318,169365,363396,626469,970580,272641,888661,077
Pound sterling
Change in holdings3,9262,588–3861,3504,3403,1576,4434,4815,913
Quantity change2,5553,0563,0921,6884,4613,7132,6013,0677,513
Price change1,371–469–3,478–338–122–5563,8421,414–1,600
Year-end value15,41418,00217,61618,96623,30626,46332,90637,38743,300
Deutsche mark
Change in holdings5,255–3,455–9,12912,38010,84912,01812,95410,525–5,577
Quantity change712–1,566–7,46818,1996,1755,77418,81220,515–9,128
Price change4,543–1,878–1,661–5,8194,6736,244–5,858–9,9903,551
Year-end value92,23888,79479,66592,044102,893114,911127,865138,390132,813
French franc
Change in holdings5,4643,545–1,302–842,6401,554–1,188–3,4853
Quantity change5,0913,528–1,0938472,063320–592–2,246–359
Price change37317–209–9315771,234–595–1,240362
Year-end value12,43815,98314,68114,59817,23718,79117,60314,11814,120
Swiss franc
Change in holdings–64–131–6131,332–1,12141403–223578
Quantity change–850211–4311,427–1,552–6691,228–123516
Price change787–342–182–95431710–825–10062
Year-end value6,8916,7606,1477,4796,3586,3996,8036,5797,157
Netherlands guilder
Change in holdings328295–2,238299–308–286–145951–80
Quantity change90371–2,241557–502–508111,237–204
Price change238–753–258194222–156–286123
Year-end value5,5935,8883,6503,9493,6423,3563,2104,1614,081
Japanese yen
Change in holdings8,0295,693–3,9405,5445,453–2,0911,982–1,8792,469
Quantity change8,2472,535–6,0204082,6577446,840941–1,855
Price change–2183,1582,0805,1362,797–2,835–4,858–2,8204,324
Year-end value43,11648,81044,86950,41355,86653,77555,75753,87856,346
European currency unit
Change in holdings1,9745,360–498–2,8209591,665985–3,240–48,366
Quantity change–7246,2833,8451,503–1,035–1,1571,833515–49,830
Price change2,697–923–4,342–4,3231,9942,822–849–3,7551,464
Year-end value54,61159,97159,47356,65457,61359,27860,26257,0228,657
Sum of the above2
Change in holdings41,27530,12516,17465,19654,07689,401131,73668,745–25,871
Quantity change51,79132,95712,09470,47166,65486,103124,12245,915–6,491
Price change–10,516–2,8324,080–5,275–12,5783,2997,61322,830–19,381
Year-end value497,970528,096544,270609,466663,541752,943884,678953,423927,552
Total official holdings3
Change in holdings65,86934,84427,39376,90561,063120,449148,491104,867–23,673
Year-end value611,047645,892673,284750,189811,252931,7021,080,1931,185,0601,161,387
Note: Components may not sum to totals because of rounding.

The currency composition of foreign exchange is based on the IMF’s currency survey and on estimates derived mainly, but not solely, from official national reports. The numbers in this table should be regarded as estimates that are subject to adjustment as more information is received. Quantity changes are derived by multiplying the changes in official holdings of each currency from the end of one quarter to the next by the average of the two SDR prices of that currency prevailing at the corresponding dates. This procedure converts the change in the quantity of national currency from own units to SDR units of account. Subtracting the SDR value of the quantity change so derived from the quarterly change in the SDR value of foreign exchange held at the end of two successive quarters and cumulating these differences yields the effect of price changes over the years shown.

Each item represents the sum of the eight currencies above.

Includes a residual whose currency composition could not be ascertained, as well as holdings of currencies other than those shown.

Note: Components may not sum to totals because of rounding.

The currency composition of foreign exchange is based on the IMF’s currency survey and on estimates derived mainly, but not solely, from official national reports. The numbers in this table should be regarded as estimates that are subject to adjustment as more information is received. Quantity changes are derived by multiplying the changes in official holdings of each currency from the end of one quarter to the next by the average of the two SDR prices of that currency prevailing at the corresponding dates. This procedure converts the change in the quantity of national currency from own units to SDR units of account. Subtracting the SDR value of the quantity change so derived from the quarterly change in the SDR value of foreign exchange held at the end of two successive quarters and cumulating these differences yields the effect of price changes over the years shown.

Each item represents the sum of the eight currencies above.

Includes a residual whose currency composition could not be ascertained, as well as holdings of currencies other than those shown.

Official reserves held in U.S. dollars increased by SDR 19 billion in 1998; this reflected an increase of SDR 47 billion in the quantity of dollars held as reserves that more than offset a decrease of SDR 28 billion in the SDR value of these holdings. A similar pattern of an increase in the quantity of holdings, offset by a smaller negative valuation effect, resulted in an increase in the net value of pound sterling reserves. Despite valuation increases, the SDR value of deutsche mark holdings fell because of a substantial decline in the quantity of reserve holdings of this currency. By contrast, the increase in the SDR value of the Japanese yen more than offset the quantity decline for this currency, resulting in an increase of SDR 2 billion in the holdings of Japanese yen. There were no significant changes in the values of French franc, Swiss franc, and Dutch guilder holdings in 1998. Official holdings of ecu reserves declined by SDR 48 billion, reflecting the reconstitution of the dollar- and gold-backed ecus originally issued by the EMI.

Refinements of Reserves Data

In collaboration with other international organizations—including the World Bank, the Organization for Economic Cooperation and Development (OECD), and the Bank for International Settlements (BIS)—the IMF has initiated a project to improve the coverage, quality, and timeliness of data provided by national authorities on official reserves and related items. In particular, under the aegis of the IMF’s Special Data Dissemination Standard (see Chapter 5), guidelines are being developed for national authorities to provide comprehensive data on reserves in a consistent format that will enable timely and efficient dissemination of these data. Furthermore, efforts are under way to improve the quality of reserves data obtained from countries that have recently become IMF members. These initiatives should result in superior and more timely data on reserves and related items becoming available in the near future.

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