The US dollar continues to lose its position as the main reserve currency to non-traditional ones, but it still remains the world's main reserve currency. This is stated in the IMF material on the dominance of the dollar in international reserves.
It is explained that the non-traditional reserve currencies, the share of which is growing in international reserves, include the Australian, Canadian and Singapore dollars, the South Korean won, the currencies of the Scandinavian countries and, in particular, the Chinese yuan. As noted by the financial institution, they “provide diversification and relatively attractive returns” and are also increasingly available for purchase, sale and storage as digital financial technologies develop.
Analysts believe that the decrease in the share of the dollar and the increase in the share of other currencies in international reserves are related to the policies of some large holders of reserves, in particular Russia. "Russia has geopolitical reasons to be cautious about storing dollars," the document said. Another reserve holder that experts say could influence the situation is Switzerland, which "has reason to hold a significant portion of its reserves in euros, as the eurozone is its geographical neighbor and most important trading partner."
Among other factors that could prompt holders to diversify reserves, the IMF points to economic fragmentation, as well as the potential “reorganization of economic and financial activities into separate, non-overlapping blocks”.
At the same time, the fund's statistics show that there can be no talk of accelerating the reduction of the role of the US dollar in international reserves, the document states. The increase in the value of the currency, according to the IMF, is facilitated by the tightening of US monetary policy, increasing geopolitical risks and the stability of the US economy.