The Euro is the second most popular reserve and growing.

For those who can't wait the collapse of the American currency, I have bad news: It won't. At least not anytime soon. One of the main factors that may disappoint the Russian leader and other dictators in this regard is the size and strong health of the U.S. economy. If Donald Trump loses the presidential elections this month, we might witness a revived optimism for the Dollar. After all, even autocratic regimes prefer storing their reserves in "democratic" currencies and the Dollars is king among them. Just look at the data released by the International Monetary Fund (IMF).

The total foreign exchange reserves amounted to more than 12.34 trillion denominated in U.S. Dollars in the second quarter of 2024, of which American money accounted for half this sum - $6.67 trillion. In terms of allocated reserves – equivalent of $11.46 trillion – the U.S. currency represented 58%, highlighting the unchallenged strength of the U.S. financial system.

Compared with the second quarter of 2023, the U.S. currency reserves added $15 billion but lost $99 billion since the first quarter of this year, according to IMF data.

The claims in Euros – the European Union’s common currency – represented the equivalent of over $2.26 trillion in the second quarter of 2024.

That is $60 billion more compared with the second quarter of 2023 and almost $12 billion more since the previous quarter this year.

The third most popular reserve currency was Japan’s Yen, which in Q2/2024 amounted to the equivalent of $641 billion (+$41 billion since Q2/2023 but -$13 billion since Q1/2024). The United Kingdom’s Pound Sterling registered claims of almost $566 billion (+$33 billion since Q2/2023 but +$3 billion since Q1/2024).

Other notable reserves were claimed in Canadian Dollars, followed by Australian Dollars, Chinese Renminbi (Yuan), and South Korean Won.

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Although China surpasses the U.S. economy in absolute terms, its currency is not a popular choice for international reserves. Russia, which has been cut off the global economy due to its aggression against Ukraine, is the largest foreign holder of Chinese Yuan; about a third of its reserves are in Chinese currency.

The share of main currencies that are held as international reserves are:

1. U.S. dollars: 58.22%
2. Euro: 19.76%
3. Japanese Yen: 5.59%
4. Pounds Sterling: 4.94%
5. Canadian Dollars: 2.68%
6. Australian Dollars: 2.24%
7. Chinese Renminbi/Yuan: 2.14%
8. Swiss Francs: 0.20%
9. Other currencies: 4.25%

As much as $882 billion represent the unallocated reserves, according to the IMF report, which covers 149 economies (93%).

The Fund says on its blog that the demand for U.S. Dollars is on the decline as more countries gradually shift to alternative currencies as part of their risk reduction and diversification policy. If the Democrats retain the White House, there might be a reverse shift.

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