Foreign investors are generally still firm holders of RMB bonds.

This is an important reason why the share of global RMB reserves has bucked the trend and has risen for ten consecutive quarters, constantly setting new historical highs. This shows that the official recognition of RMB internationalization has been further strengthened.

Guan Tao Recently, the International Monetary Fund (IMF) released global foreign exchange reserve data (CCOFER) as of the end of June this year.

Judging from the latest data from CCOFER and other sources, there are six objective facts about changes in global foreign exchange reserves in the first half of this year: First, global foreign exchange reserves have decreased significantly.

As of the end of June this year, the global foreign exchange reserve balance was US$12,036.8 billion, a decrease of US$883.8 billion from the end of the previous year.

Among them, the global foreign exchange reserve balance composed of disclosed currencies was US$11,174.9 billion, a decrease of US$874.9 billion; the global foreign exchange reserve balance composed of undisclosed currencies was US$861.8 billion, a decrease of US$8.9 billion.

Looking at each quarter, global foreign exchange reserve balances decreased by US$375.6 billion in the first quarter and US$508.1 billion in the second quarter, respectively ranking among the top two single-quarter declines in foreign exchange reserves in history.

By the end of June this year, the global foreign exchange reserve balance was equivalent to 5.91 months of annualized global imports of goods (that is, the total from the third quarter of 2021 to the second quarter of 2022), a decrease of 14.2% from the end of the previous year, the lowest since 2009.

This increases the risk of a balance of payments crisis in emerging markets and developing countries with heavy foreign debt, such as reserve shortages, trade deficits, and foreign debt.

Second, with the exception of the Swiss franc, the global holding balances of the other seven major reserve currencies disclosed by the IMF have all declined.

As of the end of June this year, among the global foreign exchange reserves with disclosed currency composition, the U.S. dollar reserve balance was US$6,652.4 billion, a decrease of US$433.6 billion from the end of the previous year, contributing 50% of the decline in global foreign exchange reserve balances with disclosed currency composition during the same period; the euro

The reserve balance was US$2,208.9 billion, a decrease of US$272.4 billion, contributing 31%; the Japanese yen reserve balance was US$578.5 billion, a decrease of US$86.6 billion, contributing 10%; the British pound reserve balance was US$545.1 billion, a decrease of US$34.3 billion, contributing 3.9%

.

The top four reserve currencies contributed to 95% of the decline in foreign exchange reserve balances in the first half of the year.

During the same period, the RMB reserve balance was US$322.4 billion, a decrease of US$14.9 billion, contributing 1.7%; the Canadian dollar reserve balance was US$278.2 billion, a decrease of US$8.7 billion, contributing 1.0%; the Australian dollar reserve balance was US$210 billion, a decrease of US$11.3 billion, contributing

The reserve balance of Swiss francs was US$27.6 billion, an increase of US$6.8 billion, with a negative contribution of 0.8%; the reserve balance of other currencies totaled US$351.8 billion, a decrease of US$19.9 billion, with a negative contribution of 2.3%.

Third, in addition to the decline in the reserve shares of the euro and the yen, the shares of the other six major reserve currencies disclosed by the IMF have all increased.

As of the end of June this year, among the global foreign exchange reserve balances that have disclosed currency composition, the share of US dollar reserves was 59.53%, an increase of 0.72 percentage points from the end of the previous year; the share of euro reserves was 19.77%, a decrease of 0.83 percentage points; the share of Japanese yen reserves was 19.77%, a decrease of 0.83 percentage points.

5.18%, a decrease of 0.34 percentage points; the British pound reserve share was 4.88%, an increase of 0.069 percentage points; the RMB reserve share was 2.88%, an increase of 0.09 percentage points; the Canadian dollar was 2.49%, an increase of 0.11 percentage points; the Australian dollar reserve share was 1.88%, an increase

0.04 percentage points; the share of Swiss franc reserves was 0.25%, an increase of 0.075 percentage points; the share of other currency reserves totaled 3.15%, an increase of 0.06 percentage points.

It can be seen that although the value of the U.S. dollar of most major reserve currencies has declined compared with the end of last year, the U.S. dollar, Canadian dollar, RMB, and Swiss franc are still the top four beneficiaries of the increase in the share of global reserves.

The euro and the yen were the biggest losers, with the euro's share hitting a new low since the end of the second quarter of 2017.

Fourth, the negative valuation effect caused by exchange rate depreciation is the main reason for the decrease in the dollar value of the global pound, Japanese yen, euro, Canadian dollar, Australian dollar and RMB foreign exchange reserve balances.

In the first half of this year, driven by rising inflation and unexpected tightening by the Federal Reserve, the Intercontinental Exchange (ICE) U.S. Dollar Index rose by 9.1%. Most major non-U.S. currencies fell against the U.S. dollar, and many of them experienced declines against the U.S. dollar.

Big drop.

During the same period, the exchange rates of the British pound, Japanese yen, Swiss franc, euro, Canadian dollar, Australian dollar and RMB against the US dollar fell by 10.0%, 15.2%, 4.5%, 7.8%, 1.8%, 5.0% and 5.0% respectively.

In the first half of the year, the global foreign exchange reserve balances of the aforementioned seven non-US currencies decreased cumulatively by US$421.4 billion in US dollars, and the negative valuation effect caused by exchange rate depreciation totaled US$310.7 billion, contributing 74%.