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Currency Compositions of International Reserves and the Euro Crisis

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  • Laser, Falk Hendrik
  • Weidner, Jan

Abstract

During recent years, central banks have increased the levels of their international reserves at an unprecedented pace. In this paper, we introduce new country-specific reserve data and examine determinants of the composition of inter- national reserves. Using a dataset of 36 countries (and the euro area) for the years from 1996 to 2016, we identify currency pegs and trade patterns as determinants of currency compositions. Our results emphasize the importance of transaction moti- ves for the composition of currency reserves. The euro crisis appears to have been a setback for the euro, which temporarily seemed to challenge the US dollar as the most important international reserve currency and potentially impacted the deter- mination of international reserve compositions.

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  • Laser, Falk Hendrik & Weidner, Jan, 2020. "Currency Compositions of International Reserves and the Euro Crisis," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 119368, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:119368
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/119368/
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    Cited by:

    1. Matthew Ferranti, 2022. "Estimating the Currency Composition of Foreign Exchange Reserves," Papers 2206.13751, arXiv.org, revised May 2023.
    2. Alina Iancu & Gareth Anderson & Sakai Ando & Ethan Boswell & Andrea Gamba & Shushanik Hakobyan & Lusine Lusinyan & Neil Meads & Yiqun Wu, 2022. "Reserve Currencies in an Evolving International Monetary System," Open Economies Review, Springer, vol. 33(5), pages 879-915, November.

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