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The outlook for reserve currencies

Investment by central banks into relatively higher-yielding currencies, notably renminbi, is increasing, as they look for yield and diversification
29 September 2021
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    The Bretton Woods system, allowing the exchange of US dollars for gold on demand, ended in August 1971. At that moment, the share of the US dollar within central bank reserves was above 80 per cent. Fifty years later, data provided by the International Monetary Fund shows that its share has dipped below 60 per cent, with a five per cent decline over the last four years alone.
    The most recent annual HSBC Reserve Management Trends Survey, supplemented by what we have learned from discussing the results with central bankers globally, allow us to put these figures in perspective.