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The changing composition of official reserves


  • Philip D Wooldridge


The way in which official reserves are managed is changing. Data compiled by the BIS on deposits placed by monetary authorities with commercial banks confirm that reserve managers approach diversification cautiously. Nevertheless, they have steadily shifted into higher-yielding, higher-risk instruments. The currency composition of reserve holdings is still highly concentrated in US dollars and euros, but the shares of some other currencies have changed significantly over time.

Suggested Citation

  • Philip D Wooldridge, 2006. "The changing composition of official reserves," BIS Quarterly Review, Bank for International Settlements, September.
  • Handle: RePEc:bis:bisqtr:0609e

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    References listed on IDEAS

    1. Edwin M. Truman & Anna Wong, 2006. "The Case for an International Reserve Diversification Standard," Working Paper Series WP06-2, Peterson Institute for International Economics.
    2. Robert McCauley, 2005. "Distinguishing global dollar reserves from official holdings in the United States," BIS Quarterly Review, Bank for International Settlements, September.
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    Cited by:

    1. Michael Bordo & Harold James, 2009. "Le dollar américain et son rôle dans l’ordre monétaire international," Revue d'Économie Financière, Programme National Persée, vol. 94(1), pages 171-186.
    2. Marie Brière & Valérie Mignon & Kim Oosterlinck & Ariane Szafarz, 2016. "Towards greater diversification in central bank reserves," Journal of Asset Management, Palgrave Macmillan, vol. 17(4), pages 295-312, July.
    3. Richard A. Iley & Mervyn K. Lewis, 2013. "Global Finance After the Crisis," Books, Edward Elgar Publishing, number 15075.
    4. Aideen Morahan & Christian B. Mulder, 2013. "Survey of Reserve Managers; Lessons from the Crisis," IMF Working Papers 13/99, International Monetary Fund.
    5. Anna Wong, 2007. "Measurement and Inference in International Reserve Diversification," Working Paper Series WP07-6, Peterson Institute for International Economics.
    6. Aristovnik, Aleksander & Čeč, Tanja, 2010. "Compositional Analysis Of Foreign Currency Reserves In The 1999-2007 Period. The Euro Vs. The Dollar As Leading Reserve Currency," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 165-181, March.
    7. repec:eee:jimfin:v:74:y:2017:i:c:p:371-385 is not listed on IDEAS
    8. M S Mohanty & Philip Turner, 2006. "Foreign exchange reserve accumulation in emerging markets: what are the domestic implications?," BIS Quarterly Review, Bank for International Settlements, September.
    9. Benjamin J. Cohen, 2009. "Dollar Dominance, Euro Aspirations: Recipe for Discord?," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 741-766, September.
    10. Olivier Jeanne, 2007. "International Reserves in Emerging Market Countries: Too Much of a Good Thing?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 38(1), pages 1-80.

    More about this item

    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
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets


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