FOREX: Analysts Caution Over-interpretation Of AUD/CHF FX Reserve Swings

Some analysts have emphasised the need for caution when interpreting the IMF COFER data though, particularly with respect to the swings in CHF and AUD (and to a lesser extent JPY) reserves.

• Goldman Sachs: “The curious drop in AUD (-68bn) and JPY (-68bn) reserves, with a corresponding surge in CHF (+68bn) reserves is puzzling. This marks the largest 1-quarter change for each currency, and by some margin. Given the magnitude, and no clear market catalyst, we think this most likely indicates a shift in strategy from one large reserve manager rather than a broader adjustment”.
  • “But, we do not see a corresponding entry in other financial flow data, like the BoP for these countries. The lack of price impact is the most noticeable, and leaves us skeptical that this represented a genuine shift in final currency exposure”.
  • “To give a sense of the magnitude, the SNB intervened by roughly this amount in the aftermath of the Brexit Referendum in 2016. It seems unlikely that these flows could have gone through with little discernible impact on CHF in Q1. We expect to investigate further, but for now take these sharp shifts with a large grain of salt”.
• Standard Chartered: “The IMF data show changes of more than 30% in holdings of AUD and CHF reserves. These are very large, and we would not be surprised if they are revised. We would treat the COFER data cautiously, and would want to be confident in all of the reserve numbers before drawing strong conclusions”.
• Additionally, it's worth remembering that changes in FX reserve shares do not account for other methods of reserve diversification, for example in Gold. 95% of respondent's to the World Gold Council's 2025 Central Bank Gold Reserves Survey believe total central bank gold reserves will rise over the next 12 months. In a similar vein, "a record 43% of respondents believe that their own gold reserves will also increase over the same period", while "none of our respondents anticipate a decline in their gold reserves."
• That report also noted a “majority of respondents (73%) see moderate or significantly lower US dollar holdings within global reserves over the next five years. Respondents also believe that the share of other currencies, such as the euro and renminbi, as well as gold, will increase over the same period"