Central banks experiencing the biggest drop in foreign exchange reserves

Agency Voice of the South / Editorial Board - US bank Citigroup announced that the central banks sold about $ 260 billion of foreign exchange reserves in the second quarter of the year with those trying to banks in emerging markets to mitigate the repercussions of the flight of funds from their economies.

It was the biggest drop decline in global foreign exchange reserves in more than ten years, surpassing attrition in 2008-2009 when the central banks tried hard to control the fallout from the global financial crisis.

The International Monetary Fund published in the June 30 official reserves data for the first quarter of the year only, and will publish official data for the second quarter in a matter of weeks.

But most of the major central banks in the world have already published their reserves numbers at the end of June where Citigroup estimated it fell by $ 85 billion to US $ 11.35 trillion, but it reduces the real size of the decline.

The president said the global strategy for the foreign exchange in New York City with Steven Englander that when calculating exchange rates and currency conversions between the effects of the central banks be sold fact up to $ 260 billion of reserves.

"The central banks sold reserves to protect their currencies from collapse". She said Aberdeen, which manages assets of about $ 480 billion, reflecting concerns about the emerging markets, it is estimated net outflows of about 9.9 billion pounds to 15.46 billion dollars during the quarter ended June 30.

It is published figures on foreign exchange reserves in dollars around the world.About 64 percent of which are denominated in the US currency and the rest is denominated in other currencies and mostly in euros.

This means that when the dollar falls, the nominal value of non-dollar reserves with central banks go up automatically. But in the second quarter basic precautions and the dollar fell together.

Fell basic precautions $ 85 billion with the US currency falling three percent.Accordingly, the increased value of the portion denominated in other currencies of precautions, which a little more than four trillion dollars by about $ 120 billion.

Englander said that to compensate for this change in the value of the central banks sold more than $ 200 billion.