Central banks in emerging countries shed some of their euro holdings last year, The Financial Times says citing the IMF. Regulators have sold 45 billion euro, having reduced the European currency reserves by 8%.
Now euro holdings make up only 24% of all the reserves of developing countries, the lowest level since 2002, down from a peak of 31% as recently as 2009.
The ongoing euro area crisis has eroded global confidence in the euro. Besides, the BRICS countries are increasing their national currencies standing.
Thus, China and Brazil signed a $30 billion swap deal last week. So, the countries can borrow each other’s currency in case of financial turmoil. Meanwhile, the US dollar holds the leading position in global reserves accounting for over 60%.
Apart from developing markets, Canada and Australia are also strengthening their positions. The eurozone crisis was fueled by high sovereign debt in several countries, including Italy and Spain. Some economies had to request bailouts from the EU and the IMF.
As for Russia, the country’s international reserves consist of the US dollars, euros, monetary gold, insignificant amount of Canadian and Australian dollars, Swiss francs, Japanese yens, and the British pounds. A year ago the euro-denominated foreign exchange reserves made up about 40% of the overall holdings totaling $500 billion.