China Tops As Global Forex Reserves Up By $810bn in Five Years
OMOTAYO ARAOYE
Global foreign exchange increased by $810 billion in the last five years, reaching $11.73 trillion value in the first quarter of 2020 according to the publication by ForexSchoolOnline.com .
Of this figure, China has almost 30 percent of the world’s currency reserves or by far the largest forex reserves, with nearly $3.4 trillion worth assets as of May 2020.
Foreign exchange reserves are essential to a nation’s economic well-being and monetary authorities, realising this, use these external assets for many purposes, but mostly to ensure a central government agency has backup funds if the national currency rapidly devalues.
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 $4.32 trillion, according to data from Statista and International Monetary Fund. By the end of 2010 however, this figure rose by $4.94 trillion, reaching a total of $9.26 trillion.
Statistics show that by the end of 2013, global foreign exchange reserves jumped to $11.68 trillion. However, this figure fell to $10.71 trillion in the next three years. The IMF data indicate the total value of these assets rose by $1.02 trillion since 2016.
Analysis by currency shows the U.S. dollar accounted for nearly 62 percent of global foreign exchange reserves, with almost $6.8 trillion worth assets as of the first quarter of 2020. Euro ranked as the second-most used reserve currency, with $2.19 trillion worth assets, or more than 20 percent of global forex reserves. Japanese Jen follows with and $624 billion in currency reserves, and 5.70 percent market share, respective/
On the trail of China according to the International Monetary Fund is Japan ranked as the second country on this list with $1.64 trillion in reserve assets, twice less compared to leading China. Statistics show that Japanese forex reserves increased by $242 billion in the last four months.
As the third country on this list, Switzerland had $913.5bn in foreign exchange reserves as of May, nearly $58 billion increase in four months. Russia and India follow, with $566.1 billion and $495.7 billion worth assets, respectively. The United States forex reserves, which are mostly euros and yen, were valued at $133.2bn in July.
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