The USD has “suffered a stunning collapse” as a reserve currency, economist Stephen Jen writes in a briefing note picked up by the Financial Times. Adjusted for changes in its price, the greenback’s market share of global reserve currencies fell to 47% in 2022 from 73% in 2001. The drop was “accelerated precipitously” by the war in Ukraine, with US sanctions against Russia leading large reserve-holding countries, predominantly those in the Global South, to seek alternative currencies for international trade and reserves. “What we witnessed in 2022 was sort of a ‘defund-the-global-police’ moment, whereby many reserve managers in the world disagreed with the conduct of both Russia and the US,” Jen writes.

The USD is still the currency of global trade: The power of the greenback is twofold — as a reserve currency and a medium for global finance and trade. While the Global South is turning away from holding USD assets, it doesn’t have “the ability to divest from the US dollar as an international currency, particularly for financial transactions,” Jen says.

ALSO WORTH NOTING-

  • Central banks are buying gold at a record rate: Purchases of gold by central banks around the world hit record levels last year — and in a recent poll two-thirds of 83 central banks expect gold holdings to increase further this year. The cause? US-led sanctions on Russia, which are driving countries to de-dollarize and insulate themselves from a weaponized USD, according to Rockefeller International Chairman Ruchir Sharma. (Financial Times | Financial Times)
  • Israel’s wealth fund finally has a full-time boss: Israel's central bank has appointed Lena Krupalnik as the full-time manager of the country’s sovereign wealth fund, which was established in 2014 following the discovery of significant natural gas reserves. Krupalnik was formerly head of global investments at Israeli asset manager Menora. (Bank of Israel)
  • Binance calls off plan to buy Voyager: Crypto exchange Binance US has called off its USD 1 bn acquisitionof bankrupt crypto broker Voyager without providing a reason behind its decision. (Bloomberg)

EGX30

17,516

-0.1% (YTD: +20.0%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

18.25% deposit

19.25% lending

Tadawul

11,265

+0.9% (YTD: +7.5%)

ADX

9,646

-0.1% (YTD: -5.5%)

DFM

3,506

+0.2% (YTD: +5.1%)

S&P 500

4,072

-1.6% (YTD: +6.1%)

FTSE 100

7,891

-0.3% (YTD: +5.9%)

Euro Stoxx 50

4,378

-0.5% (YTD: +15.4%)

Brent crude

USD 80.77

-2.4%

Natural gas (Nymex)

USD 2.25

-2.3%

Gold

USD 2,007.80

+0.2%

BTC

USD 28,277

+2.9% (YTD: +71.0%)

THE CLOSING BELL-

The EGX30 fell 0.1% at Wednesday’s close on turnover of EGP 1.9 bn (about 3% above the trailing 90-day average). Local investors were net buyers. The index is up 20% YTD.

In the green: Taaleem Management Services (+7.7%), e-Finance (+5.2%) and GB Auto (+4.9%).

In the red: Heliopolis Housing and Development (-3.2%), Oriental Weavers (-2.1%) and Elsewedy Electric (-2.0%).

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