Sunday, January 10, 2010

COFER numbers show same trend

The central banks around the world are continuing to reduce their interest in dollars as depicted in the latest IMF COFER data. The dollar represents 61.65% of the total from 62.82% in the second quarter.The dollar reserves are higher but the overall increases was greater. Now there is some impact from the change in exchange rates but the data suggest there is no change in the long-term trend. Central banks are not getting any return on their money so it is not surprising that there is little desire for the dollar.

The EUR and yen both saw increases in exposure but there is further diversification across currencies which is another continuing trend.

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