The Chinese currency is going through troubled times. Global demand for the yuan is waning to the discontent of Beijing. According to the International Monetary Fund (IMF), the yuan's share in global forex reserves plummeted to its lowest level since mid-2020 at the end of the first quarter of 2024.
From January to March this year, the Chinese currency lost a significant portion of its weight in global forex reserves. As a result, the yuan's share shrank to 2.15% from the previous 2.29%. Analysts estimate this is the lowest level since the April-June quarter of 2020.
The single European currency did not avoid a similar fate: its share also decreased by 0.25% to 19.69%. Specialists note that the euro has failed to settle above the 20% threshold for five quarters in a row.
In this context, the US dollar feels like a winner: its share in global forex reserves rose by 0.41% in the last quarter, now standing at 58.85%. However, experts warn traders against too much optimism because this current USD’s share is below the average over the past five years evaluated at 59.92%. As for the British pound, experts recorded an uptick in the GBP's share (+0.03% to 4.89%) and the Australian dollar (+0.02% to 2.16%).
It was previously reported that at the end of May 2024, the yuan's share in SWIFT transactions fell to 4.47%. In March, the renminbi’s share was at 4.69%, experts point out.
