at VoxEU article Today, by ~ Robert N. McCauley With Hiro Ito and Menji Chin:
Will the freeze on Russian bank foreign exchange reserves undermine the dollar’s primary role in official foreign exchange reserves? This column examines aggregate evidence for a decline in the dollar share of official foreign exchange reserves since late 2021, against a baseline comprised of data from 1999 to 2021. The dollar share observed in March 2024 is not significantly different from the out-of-sample prediction based on this baseline. These results suggest that official reserve managers have not reduced the dollar’s role since the freeze on Russian bank assets.
Main graph(Figure 1 (From the article):
Source: IMF data; author calculations.
Note: The forecast uses a dollar share of 58.8% in Q4 2021, a constant of -0.121, and a coefficient of the valuation change effect of 0.735, where the last two are estimated based on quarterly changes in dollar share over the 91 quarters from Q2 1999 to Q4 2021.
Next link Chin, Frankl, Ito (JIMF, 2024)Quoted above.
