U.S. Ranked Fifth With $34.8 Billion : Japan Currency Reserves Swell to $81.1 Billion
Japan became the world’s biggest holder of currency reserves last year, gaining an equivalent $32 billion for a total of $81.1 billion, the International Monetary Fund said Sunday.
Japan replaced West Germany, despite the Germans’ gain of $18.7 billion worth of reserves to a total of $78.8 billion.
For the record:
12:00 a.m. March 9, 1988 FOR THE RECORD
Los Angeles Times Wednesday March 9, 1988 Home Edition Business Part 4 Page 2 Column 3 Financial Desk 2 inches; 61 words Type of Material: Correction
In an article in Monday’s Business section, the Associated Press misstated the gold holdings of Japan, West Germany and the United States. According to the International Monetary Fund, the United States held 262.14 million ounces of gold in January, 1988, up slightly from 262.04 million ounces in the fourth quarter of 1986. West Germany’s holdings of 95.18 million ounces were unchanged, as were Japan’s, at 24.23 million ounces.
The United States lost $8.7 billion for a total of $34.8 billion, dropping to fifth place from third, behind Taiwan with $74.1 billion and Britain with $41.7 billion. France, New Zealand, Norway and Iceland also had reduced reserves.
Figures for reserves include a country’s holdings of foreign currencies, its stock of the fund’s own kind of money and the level of its account with the fund itself.
The fund lists gold separately. There, Japan also took over as the biggest holder, with 61.5 billion ounces in January of this year, up from 35.4 billion at the end of 1986. West Germany’s stock of gold rose to 59.2 billion ounces from 45.6 billion in the same period.
The United States held only 32.5 billion ounces in January, down from 39.8 billion.
Taiwan showed a sharp increase of $20.3 billion in its holdings of currency. With a population of only 20 million people, it had more than 10% of the world’s reserves. Taiwan’s total apparently came largely from its foreign trade, including its huge surplus of exports to the United States.
The holdings also reflect purchases of dollars by other countries’ central banks to stem the decline of the dollar. During 1987, many governments became worried that the drop in the price of the dollar would hurt their trade by making their exports more expensive in the United States, and U.S. exports cheaper.
Intervention by governments buying dollars on world markets led to what the fund called a significant rise in the proportion of reserves held in dollars, above the 66% level of 1986. The fund’s monthly “IMF Memorandum” did not give the proportion for 1987.
Total reserves of industrial countries rose to $453 billion at the end of 1987, an increase of 28.2%.
Third World countries saw their reserves fall for the third year in a row, to $186.9 billion, though the decline amounted to only 0.2%. Oil exporting countries showed the biggest drop.
The biggest gains among developing countries came in China, Portugal, Saudi Arabia and Mexico.
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