IMF Says Reserve Holdings of Aussie, Canada at $194 Billion

Reserve managers around the world held about $194 billion in Australian and Canadian currencies, according to the first International Monetary Fund data on the global holdings of the two currencies.

The Australian dollar was 1.63 percent of $6.05 trillion in identified official foreign-exchange reserves in the first quarter and the Canadian currency was 1.57 percent of the total, the IMF data showed.

The U.S. dollar was 62.2 percent of allocated reserves in the January-March period, compared with 61.2 percent the prior quarter, today’s report showed. The euro’s share was 23.7 percent, compared with 24.2 percent in the fourth quarter of 2012, it showed.

The share of Aussie holdings in the January-March period was greater than 1.48 percent the prior quarter, and Canadian currency share was higher than the 1.48 percent share in the final three months of 2012, the report showed. Today’s figures for the first time specified official reserves of Australian and Canadian dollars, which previously had been indistinguishable in the “other currencies” category of the IMF’s quarterly report.

Central bank reserve managers are diversifying away from the U.S. dollar, the yen and euro after policy makers in the U.S., Japan and the euro area lowered benchmark borrowing costs to almost zero. Allocated Aussie holdings last quarter totaled $98.7 billion, and Canadian currency holdings were $94.9 billion, today’s report showed.

Currency Appeal

The appeal of assets from Australia and Canada, among only 11 sovereign markets with the top credit score from all three major ratings companies, increased as the two nations’ currencies offered buyers both safety and relatively higher yields.

A report released on April 8 by Central Banking Publications and Royal Bank of Scotland Group Plc showed more than 75 percent of the 60 central banks polled had bought the Australian or Canadian currencies. The IMF’s decision to add the Aussie and loonie, as the Canadian dollar is nicknamed, to the currencies reported in its data on central bank holdings will affect those organizations’ decisions on reserves, according to 38 of those surveyed.

The Reserve Bank of Australia said in February the country’s currency is held by as many as 34 central banks. The central banks of Slovakia and Slovenia were recent additions in a list of 16 economies that publicly hold the Aussie, according to papers prepared in the second half of 2012 and released Feb. 28 under a Freedom of Information Act request by Bloomberg News. Newcomers on a list of 18 possible holders included China, France, India, South Korea, Thailand and South Africa.

Market Drop

An 11 percent slump in the Aussie this quarter spurred the biggest sovereign debt decline among top-rated countries tracked by Bank of America Merrill Lynch index data. The loonie’s 2.5 percent drop helped deliver a 5.4 percent loss to bond investors, the figures show.

The IMF lists reserves as allocated -- those whose currency composition has been identified -- and unallocated. Allocated reserves in the first quarter totaled $6.05 trillion, or 54.6 percent of the total, leaving $5.04 trillion as unallocated.

According to the IMF’s website, 34 advanced nations and 109 emerging and developing economies report to the fund’s currency composition of official foreign exchange reserves, or COFER, database.

To contact the reporter on this story: Brendan Murray in Washington at brmurray@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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