China on top as total foreign exchange reserves rose by US$810b in five years

By Our Reporter

Foreign exchange reserves are essential to a nation’s economic well-being. Monetary authorities use these external assets for many purposes, but mostly to ensure a central government agency has backup funds if the national currency rapidly devalues.

According to data gathered by ForexSchoolOnline.com, total foreign exchange reserves increased by US$810 billion in the last five years, reaching US$11.73 trillion value in the first quarter of 2020.

U.S. Dollar accounts for 62 percent of foreign exchange reserves

Foreign exchange reserves can include deposits, banknotes, bonds, treasury bills, and other government securities. In 2005, the total value of these external assets worldwide reached US$4.32 trillion, revealed Statista and International Monetary Fund data. In the next five years, this figure rose by US$4.94 trillion, reaching a total of US$9.26 trillion at the end of 2010.

Statistics show that by the end of 2013, global foreign exchange reserves jumped to US$11.68trn. However, this figure fell to US$10.71 trillion in the next three years. The IMF data indicate the total value of these assets rose by US$1.02 trillion since 2016.

Analyzed by currency, the U.S. dollar accounted for nearly 62 percent of global foreign exchange reserves, with almost US$6.8 trillion worth assets as of the first quarter of 2020. Euro ranked as the second-most used reserve currency, with US$2.19 trillion worth assets, or more than 20 percent of global forex reserves. Japanese Jen follows with  US$624 billion in currency reserves, and 5.70 percent market share, respectively.

China holds nearly one-third of global currency reserves

China has by far the largest forex reserves, with nearly US3.4 trillion worth assets as of May 2020, or almost 30 percent of the world`s currency reserves. The International Monetary Fund data revealed that Japan ranked as the second country on this list with US$1.64 trillion in reserve assets, twice less compared to leading China. Statistics show that Japanese forex reserves increased by US$242 billion in the last four months.

As the third country on this list, Switzerland had US$913.5 billion in foreign exchange reserves as of May, nearly US$58 billion increase in four months. Russia and India follow, with US$566.1 billion and US$495.7 billion worth assets, respectively. The United States forex reserves, which are mostly euros and yen, were valued at US$133.2 billion in July.Attachments area