Latest news with #currencyreserves
Yahoo
09-07-2025
- Business
- Yahoo
Dollar cedes ground to euro, Swiss franc shines in global reserves, IMF data shows
By Karin Strohecker and Grant Smith LONDON (Reuters) -The U.S. dollar's share of global currency reserves reported to the International Monetary Fund nudged lower to 57.7% in the first quarter of 2025 while the share of euro-denominated reserves gained, International Monetary Fund data showed. Shares of global currency reserves held in the greenback stood at 57.8% at the end of 2024, while the share of euros gained from 19.8% to 20.1% - their highest since late 2022, according to the IMF's Currency Composition of Official Foreign Exchange Reserves (COFER) data released on Wednesday. But it was the Swiss franc which saw the most dramatic increase, quadrupling its share to 0.8% of reserves by end-March - the highest level since at least 1999 when the euro was introduced - while the share of pound sterling also rose. Foreign currency markets have seen some dramatic swings since the start of the year. The dollar lost nearly 4% in the first quarter of the year as some big policy swings from the administration under U.S. President Donald Trump, especially on trade, security and the economy, roiled market confidence in the world's foremost reserve currency. The decline accelerated dramatically in the second quarter, when the dollar dropped more than 7% in the wake of Trump's introduction of sweeping tariffs on "Liberation Day" in early April - though some of those measures have been put on hold. On the flip side, the Swiss franc - widely seen as a safe haven currency - has become one of the best performing currencies this year, strengthening 14% against the dollar. While currency swings do not equate to reserve managers' willingness to hold them, the latest events have fuelled a debate on whether the U.S. dollar could be in danger of losing its status as the world's reserve currency of choice and the center point of the global monetary system. While some point to nascent signs of de-dollarisation, there is broad agreement that any such shift would be very slow. Looking at levels in claims, U.S. dollar claims did rise 1.4% quarter-on-quarter to $6.72 trillion, though that gain was outpaced by the euro's 2.6% rise to claims of $2.3 trillion, IMF data showed. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Free Malaysia Today
19-06-2025
- Business
- Free Malaysia Today
Malaysia's forex reserves at 3-year high to aid ringgit stability
The ringgit has been Southeast Asia's top performer this quarter, after the Singapore dollar. (EPA Images pic) KUALA LUMPUR : Malaysia's increasing currency reserves are bolstering its defenses against market volatility. The country's net foreign exchange (forex or FX) reserves rose to US$94.7 billion at the end of April, according to the latest central bank data, the most since June 2022. Strong foreign inflows into local bonds and a weaker greenback, which enabled Bank Negara Malaysia to unwind its net short forward FX position, both helped. These factors have strengthened the nation's bulwark against external shocks. 'The narrowing net shorts in FX forward book, combined with higher headline reserves, means that net reserves are rising at a faster pace,' said Winson Phoon, head of fixed-income research at Maybank Securities Pte Ltd, adding that Malaysia's improving external resilience 'helps support ringgit stability'. The extra buffer may be coming at a fortuitous time. US President Donald Trump's tariffs, Sino-American tensions and geopolitical uncertainty have boosted currency volatility, and a weakening of the US dollar has changed the FX dynamic for emerging markets. As a trade-dependent economy, Malaysia and its currency are particularly vulnerable to trade tensions between its two largest export destinations – US and China. The recent boost in foreign reserves comes partially from the US$5 billion foreign inflow into the nation's conventional government securities in this quarter so far. That's on track to be the largest quarterly inflow on record in data going back to 2005. Global funds have poured in amid optimism over the outlook of the ringgit and on rate-cut wagers, as BNM is the last rate-cut holdout in Southeast Asia. The situation is different from December. Back then, BNM's net short forward FX book had widened to US$29.2 billion – just 0.2% shy of an all-time low – as the central bank utilised currency forwards to support the ringgit. Global funds pulled out of Malaysian bonds for a fourth straight month. In addition, the ringgit was the second-worst performer in emerging Asia in the final quarter of 2024, trailing only the won. BNM pared back its net short forward book position to US$24 billion in April, the narrowest since February 2024. The unwinding, which involves selling the local currency and buying the dollar, hasn't impacted the spot ringgit's performance so far. In fact, the ringgit is Southeast Asia's top performer this quarter, after the Singapore dollar. 'A gradual pare-down of net short forward positions shouldn't create major headwinds for ringgit strength,' Maybank's Phoon added.
Bloomberg
19-06-2025
- Business
- Bloomberg
Malaysia FX Reserves at Three-Year High to Aid Ringgit Stability
Malaysia's increasing currency reserves are bolstering its defenses against market volatility. The country's net foreign exchange reserves rose to $94.7 billion at the end of April, according to the latest central bank data, the most since June 2022. Strong foreign inflows into local bonds and a weaker greenback, which enabled Bank Negara Malaysia to unwind its net short forward FX position, both helped. These factors have strengthened the nation's bulwark against external shocks.
The Independent
22-05-2025
- Business
- The Independent
Argentina's Milei unveils bold plan to lure billions in undeclared dollars back home
Argentina's government on Thursday unveiled an ambitious scheme to bring billions of undeclared U.S. dollars tucked under mattresses or stashed in foreign bank accounts back into the crisis-prone country, as libertarian President Javier Milei seeks to boost Argentina's low international currency reserves and stimulate the limping economy. By eliminating tax reporting requirements, the plan invites savers — who long have swapped their depreciating pesos for American currency in the country's underground market — to spend unreported dollars on everyday transactions at home. The government won't ask questions regarding the source of the repatriated funds, officials promised. 'Your dollars, your decision. What's yours is yours, not the state's,' Milei's presidential spokesperson, Manuel Adorni, said in a press conference announcing the policies. 'You can use them however you want, without having to prove where you got them from.' Milei — who ran on a controversial campaign pledge to 'dollarize' Argentina's troubled economy — wants a new gush of greenbacks to boost the volume of U.S. dollars in circulation. Although Argentina's depleted currency reserves sent Milei backpedaling from his initial campaign trail-fervor for 'burning down' the central bank and adopting the U.S. dollar as the national currency, these latest measures seek to hasten the country's transition to a new currency system that would see dollars gradually replacing pesos. Milei's 'endogenous dollarization' scheme would involve fixing the supply of the local currency even as Argentines could use dollars or pesos. He hopes this would encourage Argentines to use their dollar-denominated savings to buy houses and cars as the economy grows and more cash is needed in circulation. To lay the groundwork, Milei's government last year imposed a generous tax amnesty for Argentines willing to repatriate capital. In April, it lifted most currency controls as part of a $20 billion bail-out deal with the International Monetary Fund, which conditions its support on the government boosting its scarce foreign reserves. 'You can spend those dollars without anyone bothering you. So, you go, you want to buy, I don't know, a house for $200,000, no one has to ask you anything,' Milei told the TV channel of Argentine newspaper La Nacion in an interview Monday. Over decades of financial turmoil, Argentines have come to depend on U.S. dollars to evade a byzantine system of currency controls, hedge against hyperinflation and protect their nest eggs from government freezes, as has happened several times in the country's recent history, such as during the catastrophic 2001 foreign-debt default. 'This is how we reached a catastrophic outcome in which 50% of our economy ended up being informal, and the state, like Big Brother, controlled all of its citizens' transactions, as if they were criminals deserving of punishment,' Adorni said. Argentina's official statistics agency estimates that, as of late 2024, Argentine households and firms held more than $270 billion outside their financial system, largely denominated in U.S. currency. While most of the billions are in foreign bank accounts, a significant amount of cash is also stuffed under mattresses and floorboards and in rented safety deposit boxes in underground vaults across the country. 'Those who do this are not criminals,' Economy Minister Luis Caputo said Thursday. 'They are the vast majority of Argentines who have been abused by excessive taxes and controls. To encourage Argentines to spend their repatriated funds, the new measures scrap strict requirements for businesses and credit card providers to report citizens' purchases to ARCA, Argentina's equivalent of the IRS. They relax strict tax evasion rules so property buyers and public notaries won't need to report transactions. Banks won't be able to request access to clients' tax records. 'It sounds like an invitation not to pay taxes,' said Ignacio Labaqui, a Buenos Aires-based senior analyst at advisory firm Medley Global Advisors. That raises concerns about an injection of potentially dirty funds, some of which could be the product of illegal activity. Asked about the danger created by the new fiscal incentives, the IMF sounded a cautious note. 'The authorities have committed to strengthening financial transparency,' said Julie Kozack, an IMF spokesperson. 'Any new measures, including those that may be aimed at encouraging the use of undeclared assets, should be, of course, consistent with these important commitments.' ___
