From the June issue of “The World of ABC Economics”. Click HERE to download your free copy
Stefano F. Fugazzi reports.
According the latest Bank for International Settlements (BIS) survey of foreign exchange (FX) markets, the dollar was on one side of no less than 87% of overall foreign exchange trades and of over 90% in the pivotal FX swap market. The other currencies followed a long way back, with the euro at 33%, the yen at 23% and the renminbi at only 2% or so.
At end-2015, more than 60% of FX official reserves were held in the currency, admittedly down from 70% in 2000 and 75% in 1978.
Around half of non-US trade is denominated in the dollar, with the euro accounting for considerably less.