IDEAS home Printed from
   My bibliography  Save this article

International Reserve Diversification


  • Ousmène Mandeng

    () (UBS)


Central bank reserves have increased at an extraordinary pace and to unprecedented levels. The high concentration of reserve holdings by currency exposes the international monetary system to significant idiosyncratic risks and represents a source of systemic risk for overall international economic and monetary stability. The international monetary system would therefore be better off adopting greater currency diversification. This would also be a more adequate representation of the increasing diversification of the international economy and in particular the rising economic importance of emerging markets. The present note proposes a pragmatic approach based on an international reserve diversification fund to promote the gradual adoption of emerging markets currencies in central bank international reserve portfolios as a transition framework towards a multiple currency system. Such fund would also respond directly to recent proposals by the Chinese and Russian authorities to establish greater reserve currency diversification and by France to promote the internationalisation of emerging markets currencies. Agreement on or giving further considerations to such fund is seen as an important response to emerging markets concerns about the stability of the system and a possible critical deliverable for France’s G20 presidency.

Suggested Citation

  • Ousmène Mandeng, 2011. "International Reserve Diversification," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(61-62), pages 75-102, January -.
  • Handle: RePEc:bcr:ensayo:v:1:y:2011:i:61-62:p:75-102

    Download full text from publisher

    File URL:
    File Function: Spanish version (versión en Español)
    Download Restriction: no

    References listed on IDEAS

    1. Peter B. Kenen, 2010. "The Substitution Account as a First Step Toward Reform of the International Monetary System," Policy Briefs PB10-6, Peterson Institute for International Economics.
    Full references (including those not matched with items on IDEAS)

    More about this item


    central banks; dollar; international monetary system; international reserves;

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcr:ensayo:v:1:y:2011:i:61-62:p:75-102. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Federico Grillo). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.