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In the third quarter of 2023, the US dollar’s share of global central bank reserves plummeted to 59.2%, marking a significant drop from around 70% in 2000, according to the latest data from the International Monetary Fund (IMF), as reported by RT. This decline aligns with the growing global de-dollarization trend.
Despite the decrease, the US dollar maintains its status as the world’s primary reserve currency, with the euro following as the second-largest at 19.6%. The Japanese yen’s share in global reserves saw a slight increase from 5.3% to 5.5%, while the Chinese yuan, British pound, Canadian dollar, and Swiss franc remained relatively stable.
SWIFT, the global financial messaging service, compiled data indicating that the yuan’s share in international payments reached a record high in November, making it the fourth most utilized currency globally. This surge in cross-border yuan lending is coupled with over 30 bilateral currency swaps between the People’s Bank of China and foreign central banks, including those of Saudi Arabia and Argentina, as reported by RT.
The increased adoption of the yuan in cross-border transactions is indicative of China’s strategic move away from the dollar, emphasizing Beijing’s initiatives to promote the use of the renminbi, according to SWIFT.
This shift away from the US dollar gained momentum last year when Russia, facing Ukraine-related sanctions, was severed from the Western financial system, leading to the freezing of its foreign reserves, as highlighted by RT.
Amidst these developments, the US dollar is poised for its most challenging year since 2020. The US dollar index, measuring its performance against six other currencies, has witnessed a decrease of over 2% for the year. CNN attributes this weakening to the looming prospect of rate cuts anticipated for the coming year.
