Reserves
Reserve Benchmarks 2023 report – rebuilding buffers
Insights on portfolios coverage ratios, strategies to tackle high inflation, new trends in asset diversification, geopolitical risks and external managers
The Covid-19 pandemic and the ongoing inflationary shock put pressure on reserves portfolios. After deploying FX assets to support exchange rates and tame import prices, central banks now need to rebuild their buffers.
According to the Reserve Benchmarks 2023, the average import coverage ratio narrowed further by 3.5% year on year. To accomplish this goal, these institutions are considering new approaches to asset diversification, while maintaining traditional strategies such as tranching their assets between investment and liquidity portfolios.
Charts
Asset allocations
It will come as little surprise that central banks allocate the largest portion of their reserves to US Treasuries.
But some other trends stand out. Investors in Asia and Europe are more likely to invest in SIBs. Almost all holdings of exchange-traded funds (ETFs) are in high income jurisdictions. Central banks from high income countries are also more likely to invest in green bonds, and in currencies such as the yen and sterling.
For the full breakdown, use the benchmarking service’s interactive charts to explore the data.
Reserve Benchmarks 2023 – model banks analysis
Data sheds light on key differences between advanced, emerging and developing economies
Reserves data
View the full breakdown of responses to the Reserves Benchmarks.
Previous years
Reserves 2023
Reserves 2022
Reserves 2021
Reserves 2020
Reserve Benchmarks 2023 – model banks analysis
Data sheds light on key differences between advanced, emerging and developing economies
Reserve Benchmarks 2023 – executive summary
Key findings of the 2023 benchmark, including coverage ratios, strategies to tackle high inflation, new trends in asset diversification, geopolitical risks and external managers
Reserve Benchmarks 2023 report – rebuilding buffers
Insights on portfolios coverage ratios, strategies to tackle high inflation, new trends in asset diversification, geopolitical risks and external managers
Over 15% of reserve managers plan diversification changes
Close to 14% of participants will increase diversification, while 17.2% are discussing changes
Fewer central banks added new reserve assets in 2023
Overall, 10.3% of institutions diversified their asset allocation, down from 18.6% last year
Wallstreet and others rank highest for reserves technology services
Ion’s Wallstreet treasury system tops the 2023 rankings
Reserve managers rank JP Morgan top for custody and banking
BlackRock preferred for knowledge transfer and capacity building
Reserve managers vote BlackRock as overall best asset manager
Goldman Sachs and “other” asset management firms also score highly
High income countries less likely to tranche reserves
Overall, 72.4% of central banks divide their portfolios into liquidity and investment sections
Fewer than half of reserve managers perform liquidity stress tests
Approach tends to be more common among African and American institutions
FX reserves commonly invested in US Treasuries, bank deposits
SIBs and EU NextGeneration fund trail behind, as reserve managers avoid infrastructure and crypto
Few central banks expanded existing swap lines over the past year
Nearly one-third of new and existing lines are denominated in US dollars