From a VoxEU article today, by Robert N. McCauley with Hiro Ito and Menzie Chinn:
Will the freezing of the Bank of Russia’s foreign exchange reserves undermine the dollar’s predominant role in official foreign exchange reserves? This column examines the aggregate evidence since end-2021 for any reduction in the dollar share of official foreign exchange reserves against a baseline constructed with data from 1999 through 2021. The observed dollar share in March 2024 differs little from the out-of-sample projection based on this baseline. On this showing, official reserve managers have not reduced the role of the dollar since the freeze of the Bank of Russia’s assets.
The key graph (Figure 1 from the article):
Source: IMF Cofer; authors’ calculations.
Note: Projection uses 2021Q4 dollar share of 58.8%, constant of -.121 and coefficient for the effect of valuation change of .735. where the latter two are estimated from quarterly changes in the dollar share over the 91 quarters 1999Q2-2021Q4.
Link to Chinn, Frankel and Ito (JIMF, 2024), cited above.
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