BPM6
Update
Current Account Task Team (CATT)
IMF Committee on
Balance of Payments
Statistics
C.3 International Trade Classified by Currency
(Including for Trade Linked to Long-term Trade
Credits and Advances)
FOR PUBLIC CONSULTATION
1
C.3 International Trade Classified by Currency
(Including for Trade Linked to Long-term Trade Credits and Advances)
1
Currency composition for external sector statistics is of great interest to assess cross-border risks at both
country and global levels. International institutions have developed some related initiatives which focus
mainly on cross-border position or the foreign exchange market. This Guidance Note recognizes the
analytical value of the currency composition of international trade and proposes improvements to be
considered in the update of the Manual. It recommends the development of an encouraged (voluntary)
data collection template that introduces a disaggregation of international trade by currency.
SECTION I: THE ISSUE
BACKGROUND
1. Currently, none of the international standards (i.e., the IMF’s Balance of Payments and
International Investment Position Manual, sixth edition (BPM6), the System of National Accounts
2008 (2008 SNA), and the International Merchandise Trade Statistics 2010 (2010 IMTS)) include the
currency composition of international trade in goods and services accounts. However, the BPM6
recommends the compilation by currency composition of derivatives and debt claims and liabilities on/to
nonresidents.
2
2. Guidelines and initiatives coordinated by international organizations are primarily
covering currency composition of positions. For example, the Currency Composition of Official
Foreign Exchange Reserves (COFER) is managed by the IMF and contains quarterly positions statistics
on reserve assets, split by currency composition.
3
The Coordinated Portfolio Investment Survey (CPIS) is
also managed by the IMF and has a table for Currency breakdown of portfolio investment assets
. The
International Investment Position (IIP) currency composition is collected by the IMF as memorandum
presentations of the IIP and a recommendation by the G-20 Data Gaps Initiative to support the analysis of
currency mismatches and liquidity risks in the external position of a country.
4, 5
The World Bank’s
Quarterly External Debt Statistics (QEDS) dataset includes two tables with a breakdown of external debt
1
Prepared by Thiago Vieira (Banco Central Do Brasil), Bedri Zymeri (in his previous capacity at the Central Bank of
the Republic of Kosovo), Angela Gherman-Cernei (National Bank of Moldova), Mounir Rhandi (Morocco Foreign
Exchange Office) with input from Renan Sousa, Rafael Monastier, Bruno Tiberto, and Tulio Brant (Banco Central do
Brasil), Fatiha Talbi (Morocco Foreign Exchange Office), and Angela Moraru (National Bank of Moldova).
2
Institutional sectors and instruments are also covered by these suggested tables. In BPM6, see Appendix 9,
Section C “Additional Analytical Position Data”, item (a) “Currency Composition”.
3
Official foreign exchange reserves are presented by currency at world level. Individual country data is strictly
confidential. In December 2020, there were 149 reporting countries.
https://data.imf.org/?sk=E6A5F467-C14B-4AA8-
9F6D-5A09EC4E62A4
4
“Recommendation II.10: IIP: The G-20 economies to provide quarterly IIP data to the IMF, consistent with the
BPM6, and including the enhancements such as the currency composition and separate identification of other
(non-bank) financial corporations, introduced in that Manual.” www.imf.org/external/np/g20/pdf/2016/090216.pdf
5
In response to a request from the G-20 Finance Ministers and Central Bank Governors, data gaps involving foreign
currency exposures were discussed by the IMF at www.imf.org/external/np/g20/pdf/2015/foreigncurrency.pdf
.
2
by currency.
6
The Bank for International Settlements (BIS) undertakes the “Triennial Central Bank Survey
of Foreign Exchange and Over-the-counter (OTC) Derivatives Markets”,
7
providing data on foreign
exchange market by currency since 1989 (includes all foreign exchange operations, with no separate
identification for transactions related to international trade in goods and services). The BIS also
coordinates quarterly data collection on locational banking statistics, which provides information about the
geographical and currency composition of banks' assets and liabilities
. Annex II.3 presents figures on
some of these currency composition initiatives.
3. According to the IMF’s 2020 BOPSY dataset – World and Regional Aggregates, and
measuring by the exports side, the 2019 international transactions in goods and services
accounted for US$24.7 trillion, representing about 28.2 percent of global GDP. The World and
Regional Aggregates section in the BOPSY presents aggregated country and global data, including
imports and exports from more than 180 countries.
8
4. Currency composition of international trade has an important analytical value. Several
efforts are ongoing to collect data on currency composition of international trade and build up
cross-country datasets. For example, the European Central Bank (ECB) has worked on developing
a
database on trade in goods and services by currency and Eurostat is collecting trade by invoicing
currency data for Extrastat.
9
These databases provide useful information, supporting analyses of euro
vis-à-vis other currencies used in trade invoicing, and are also used by financial market segments and
foreign investors.
10
In addition, several academic attempts to build cross-country datasets related to
international trade classified by currency are summarized in Annex II.2.
5. Ongoing statistical initiatives and research, which have the potential to provide
policymakers and the statistical community with key insights, could benefit from recommended
international standards and guidance on this topic. Kamps (2006) showed the currency in which the
international trade is invoiced has micro- and macroeconomic implications. At the firm level, the profit
maximization of firms engaged in international trade is affected by their choice of currency. At the
macroeconomic level, it affects business cycle correlations between countries and the transmission
mechanism of monetary policy. Goldberg and Tille (2008) claimed industry features and country size are
the determinants to choose invoice currency while Ito and Chinn (2014) revealed the countries with more
open capital accounts tend to invoice in either the euro or their domestic currency and less in the
U.S. dollar. In addition, Boz et al (2020) showed the role of vehicle currency invoicing for exchange rate
pass-through to import prices and trade volumes, and Adler et al (2020) revealed that invoicing exports in
US dollars, instead of in domestic currencies as assumed by traditional models, dampens exports
response to exchange rates depreciation, especially in the short term.
6
See Tables 2 and 2.1 at https://datatopics.worldbank.org/debt/qeds.
7
This survey use data reported every three years by dealers in more than 42 additional jurisdictions.
www.bis.org/statistics/rpfx19.htm?m=6%7C32%7C617
.
8
Where data are not reported by countries, estimates are made to gap-fill mainly based on World Economic Outlook
data. However, the impact of the non-reporters is negligible.
9
Eurostat is collecting and publishing trade in goods data by currency for the EU Member States whenever the
trading partner is a non-EU country. These data are collected via customs declarations or a dedicated survey and
released every two years.
10
https://ec.europa.eu/eurostat/cache/metadata/en/ext_lt_invcur_sims.htm#contact1612774190381
3
6. Currency composition of international trade is of high interest for a wide range of
stakeholders, including (a) policymakers and academic researchers (fostering the assessment of
external sector vulnerabilities, sustainability analysis, monetary unions, regional integration, trade policy,
and exchange rate pass-through);
11
(b) Analysts and foreign exchange market participants (providing
information to analyze developments and trends of the local foreign exchange markets and to better
forecast foreign exchange rate dynamics); and (c) IMF research and assessments (helping to define
composition and weight of the Special Drawing Rights (SDR) currency basket, as well as to
assess
reserves adequacy and determine whether a currency meets the concept of being "freely usable for
settlements of international transactions" to be included in reserves definition).
ISSUES FOR DISCUSSION
Scope
7. International trade classification by currency can be appended either onto the goods and
services account or their corresponding entries in the financial account.
12
The change of ownership
of goods and the rendering/consumption of services are recorded in the current account. The
corresponding entry in the financial account can be spread over several financial instruments, such as
trade credit and advances, currency and deposits, or loans. Except for trade credit and advances, these
accounts cover entries that may or may not be related to international trade.
8. Appending the currency breakdown onto the goods and services accounts would
emphasize the consistency with the standard balance of payments components and enable the
links with other datasets. The totals in the trade by currency composition table would equal the totals in
the goods and services accounts. This option would make the statistics easy to interpret and increase
their usefulness since the analysis and the research undertaken on international trade are generally
based on the “real” side of international trade. For example, breakdowns by product, type of service and
partner country are all based on the concepts of change of economic ownership (goods) and
rendering/consumption (of services), and not linked to their respective payments.
9. The collection of international trade data broken down by currency could start with a
template applicable to goods only or by introducing separate templates for both goods and
services on a voluntary basis. Some authors argued that the heterogeneity of various types of services
and the use of hybrid data sources and models for their compilation might reduce the quality of trade in
services by currency, as compared with trade in goods by currency. Nevertheless, not covering services
would mean leaving out a relevant current account item, given that they have an increasing share in
global international trade. According to the IMF’s 2020 BOPSY dataset, world exports of services have
increased by 52 percent between 2008–2019, reaching US$6.1 trillion in 2019. During the same period,
the share of services in global exports increased from 20.2 percent to 24.6 percent. Additionally,
international trade in services may follow distinct patterns of currency composition, justifying a separate
breakdown.
11
Some countries are highly dependent on a larger regional neighbor for their international trade activities (see
BPM6, paragraph 6.73).
12
Two exceptions are barter trade and donations, which have counterpart entries in the current account and capital
account instead of the financial account.
4
10. Adding further breakdowns to the template, such as by product (in the case of goods) or
by type of service, would enrich the information
13
but at the same time increase the compilation
burden. While the breakdown of goods by product is currently outside of the external sector statistics
(ESS) scope, an additional breakdown of the 12 categories of services
14
by currency is considered as one
of the reporting options on the recommendations section.
Currency Concept
11. One key issue when providing guidance on currency composition of international trade is
to determine whether to use the currency of denomination or the currency of settlement. This
choice is closely related to the decision to append the classification by currency onto the goods and
services account or to their corresponding entries in the financial account. According to BPM6, paragraph
3.98, “the currency of denomination is determined by the currency in which the value of flows and
positions is fixed as specified in the contract between the parties… and allows the possibility to
distinguish the transaction values and holding gains and losses”. Paragraph 3.99 recognizes that the
currency of settlement may be different from the currency of denomination, in which case “(…) a currency
conversion is involved each time a settlement occurs… and is related to liquidity and potential foreign
exchange drains”. The currency of denomination allows the assessment of exchange rate vulnerabilities.
The currency of settlement could be used as an input for strategic asset and liability allocation, risk
management of international reserves or monitoring flows in the foreign exchange market. The currency
of settlement is related to the corresponding financial flows and not with trade itself.
12. Conceptually, the currency of denomination seems to be the best option for the currency
composition of international trade. In the context of international trade, the currency of denomination is
the one in which the price and consequently the value of the goods and services is fixed, therefore
influencing the terms of trade. It is also more aligned with the principle of change of ownership. In terms
of time of recording, the currency of denomination is known at the same time or close to the time when
the change of ownership of goods occurs or when the service is rendered/consumed. If the currency of
settlement were used instead, the dissociation between the trade flows and their settlements could pose
compilation difficulties, especially when long-term assets and liabilities are involved.
15
Data Sources
13. The currency of denomination is closely related to invoices. Invoices show the currency in
which the cross-border trade transaction is denominated. The BPM6 Compilation Guide states in
paragraph A7.43 (emphasis added): “This concept [currency of denomination] identifies the currency of
denomination of the financial instrument or of the invoice of goods and services. For balance of
payments and IIP data, the concept is usually recorded as all currency of denomination”. Invoices have
been generally used as source data in academic studies of currency composition of international trade, as
13
For example, a study by the Australia Bureau of Statistics in 2016 has shown that invoice currency in Australian
exports vary by type of product. While the U.S. dollar is largely dominant among petroleum, metals and other
commodities, the Australian dollar is more important for manufactured goods.
14
GN C.6 (Trade in services classifications) proposes to increase the number of main service categories.
15
In Brazil, large exporting enterprises in mining and oil industries commonly undertake trade credit and advances
with more than 10 years of financing.
5
listed in the Annex II.2. Besides, it could be obtained from customs declarations for most countries that
rely on this data source to compile trade in goods statistics. Nevertheless, the GZTT/CATT consultation to
date for Guidance Note (GN) G.1/C.11 “Valuation of Imports and Exports of Goods in International
Standards (CIF to FOB Adjustment)” shows that access to invoice data might be challenging to the
agencies responsible for compiling balance of payments.
16
The GN G.1/C.11 proposal to use trade
invoicing is currently in the testing phase by both balance of payments and national accounts
communities.
17
The outcome of this exercise could also serve as indicator to assess the feasibility of
using trade invoices in compiling currency composition.
14. Nevertheless, the use of invoices is not the only feasible source for the currency of
denomination. Alternative sources should also be considered. Depending on the trade finance structure
and regulation specificities, a combination of data sources for the goods and services account, such as
surveys, settlements data from an International Transactions Reporting System (ITRS) and/or other
administrative data (including value-added tax systems) could be used to obtain the best proxy for the
currency of denomination. Annex II.4 provides a collection of data sources other than invoices that are
available in some countries represented by the drafting team. Annex II.5 presents the exploratory
exercises undertaken by some of the authors of this GN to compile the international trade classified by
currency. There may be a need to modify the already existing source data or add new data collection
forms. Surveys may have to be created or modified to account for the currency breakdown of international
trade. The ITRS may also contain information from banking records on the settlement currency of
payments related to international trade.
List of Currencies
15. The first level breakdown for currency composition is distinguishing domestic currency
from foreign currency. The use of domestic currency is important to understand the role of the country’s
own currency from the trade perspective, as well as to assess the external sector vulnerabilities.
16. Beyond the domestic/foreign currency breakdown, the template should specify the most
used currencies worldwide. In this context, it seems appropriate to use the SDR basket
18
as reference.
The SDR basket is reviewed every five years, and it could be used as a starting point to define the
currencies to identify in the currency composition on the international trade. A common set of currencies
is important for cross-country comparison and in the analysis of global and regional trends.
17. In addition, foreign currencies other than those in the SDR basket may be explicitly
reported depending on their importance for the reporting economies. Many economies have a
significant share of their international trade with neighboring countries. In some cases, local currencies
used for trade are very important in the region, even though not widely traded at global level (e.g., Indian
rupees for neighboring countries). In these cases, the information on these regional currencies is certainly
useful.
16
GN G.1/C.11, paragraph 28, at https://www.imf.org/-/media/Files/Data/Statistics/BPM6/GZTT/g1-valuation-of-
imports-and-exports-of-goods-in-the-international-standards-cif-to-fob-adjustment.ashx.
17
This testing exercise and the final version of the GN are expected to be available in June 2021 and August 2021,
respectively.
18
The SDR basket is currently composed of pounds Sterling, Chinese yuan, euro, Japanese yen and the U.S. dollar.
6
18. Currency composition of international trade should also have an unallocated item in the
template. The unallocated item already figures in other currency composition initiatives, such as the
BPM6 A.9.I and QEDS tables. The unallocated component could be used as a buffer to address currency
allocation difficulties associated to some categories of goods/services whose estimation depends on less
reliable information or on modelling techniques (e.g., travel and FISIM). Besides filling in the gap for the
unavailable information, the unallocated item is necessary because not all changes of ownership (goods)
or consumption/production of services are expressed in a specific currency. Two examples would be
barter trade and in-kind transfers.
Periodicity
19. The periodicity should consider both the users’ analytical needs and the compilers’
capabilities to produce the currency composition of international trade statistics. A quarterly
reporting would maintain the current reporting standards for the ESS, but the currency composition of
international trade is not expected to show frequent sudden changes. Boz et al (2020) use an annual
frequency for invoicing currency in global trade and seem to appropriately capture data trends even in the
presence of major historical events, such as the creation of a monetary union. Thus, an annual
compilation can reduce compilation burden without greatly reducing the analytical value of the data.
SECTION II: OUTCOMES
RECOMMENDATIONS
20. This GN is proposing the development of an encouraged data collection template that
introduces further breakdown of the imports and exports of goods, or goods and services, by
currency as part of the reporting of the balance of payments statistics, as presented in Annex I.
19
These statistics have an important analytical value for a wide variety of users, including analysts,
policymakers, academic researchers, and foreign exchange market participants.
21. Proposed breakdown: The proposal is for the currency breakdown to be appended onto
the total values of the goods and services accounts.
20
Three out of four authors agreed with this
recommendation. This should ensure consistency within the current ESS framework. The total values of
the goods and services accounts serve as a benchmark for the currency breakdown. Alternatively, one
author suggested a phased approach,
21
starting with the reporting of the currency composition of
merchandise trade statistics partly adjusted (see for example the methodological note for the Table 7 in
Annex II.5), followed by assessing user needs and developing the data sources needed to compile the
currency composition of all adjustment categories, as proposed in the reconciliation between IMTS and
goods on a BOP basis (see BPM6 Table 10.2). This approach could generate inconsistency initially
between the currency breakdown and the totals of goods in balance of payments, however, it also has
some benefits, such as a higher reporting frequency and less compilation and respondent burden. The
same author suggests that the consultations on the issue of currency composition of trade in goods be
19
One CATT member disagreed with this recommendation.
20
Two CATT members disagreed with this recommendation.
21
One CATT member also suggested a phased approach.
7
continued as part of the update of IMTS and Manual on Statistics of International Trade in Services
(MSITS) in order to promote the reconciliation among different statistical approaches in methodologies.
22
22. The currency of denomination is proposed to be used to develop statistics of international
trade by currency.
23
Compared to the currency of settlement, the currency of denomination concept is
more aligned with the ESS principles, including the change of ownership, time of recording and valuation.
Additionally, the currency of denomination allows to measure the risk exposures arising from exchange
rates changes.
23. Source data: Invoices are proposed to be the main data source for compiling the currency
composition of international trade in goods. However, the currency of settlement could be acceptable
for reporting if data on currency of denomination are not available or are not of sufficient quality. For some
countries, developing and using invoice-based data sources can be burdensome. Even for those
countries that have access to invoice data, it is likely that not all transactions are covered. Using a mix of
these two data sources could raise issues of comparability and bilateral asymmetries, but, on the other
hand, it will enhance the coverage and could increase the number of reporting economies.
24. The drafting team considered three options for the reporting templates as presented in
Annex I, and within the CATT, a majority of members supported Option 2:
• Option 1: Report the currency composition only for the gross totals of the imports and exports of
international trade in goods. This option considers the fact that the breakdown of trade in services
by currency would have more source data issues that could reduce data quality.
• Option 2: Report the currency composition for the gross totals of the imports and exports of both
goods and services. This option underscores the increasing importance of services in global
trade; countries may still choose to report only the goods breakdown if services data are of poor
quality or not available.
• Option 3: Report more detailed currency breakdowns according to the balance of payments
standard components of goods and services.
25. Periodicity: The proposal is for the reporting of currency breakdown of international trade
with an annual periodicity, with which CATT members unanimously agreed.
24
A quarterly reporting
proposal, while favouring the availability of data with increased frequency, may unnecessarily increase
the compilation burden. If countries with advanced collection system can provide this information with a
higher frequency (quarterly and/or monthly), they are strongly encouraged to do so.
22
During CATT review, one member also suggested to consult on this issue with the international organizations
responsible for the IMTS and the MSITS. Another member affirmed that this issue should be dealt with in foreign
trade statistics and MSITS, not in the BPM6 update.
23
All CATT members agreed with this recommendation.
24
This is consistent with the periodicity proposed by the GN “C.2 Goods, Services, and Investment Income Accounts
by Enterprise Characteristics” template, which is also proposing the collection of additional dimensions of the
transactions in the goods and services accounts.
8
26. List of currencies: The majority of CATT members agreed with having domestic and
foreign currencies, with a further breakdown of the latter according to the SDR basket.
25
Depending on the importance of non-SDR basket currencies to the international trade of each economy,
these currencies could also be reported on a voluntary basis. An unallocated item is also proposed.
Questions for Discussion:
1. Do Committee members support the need to develop a voluntary data collection template for
international trade classified by currency?
If the answer to Q1 is “Yes”, please answer the following questions:
2. Do Committee members agree that international trade classified by currency should be appended
onto the balance of payments’ goods and services account?
3. Do Committee members agree that the classification used to compile international trade by
currency should be based on the currency of denomination?
4. Do Committee members support Option 2 for the reporting template of international trade
classified by currency?
5. Do Committee members support an annual collection of international trade classified by
currency?
6. Do Committee members agree with the proposed currency breakdown to be included in the
template?
25
One CATT member disagreed with this recommendation.
9
Annex I. Proposed Templates for a Voluntary Collection of Currency Composition of International
Trade
Option 1: Currency Composition of International Trade Covering Goods
Year
Goods
Credits
Debits
Total
1
Domestic currency
Foreign currency
SDR basket currencies
U.S. dollar
Euro
Chinese yuan
Japanese yen
Pounds sterling
Other currencies
of which
2
: Currency A
of which
2
: Currency B
of which
2
: Currency C
Unallocated
1
Should be equal to balance of payments goods account.
2
Report if a non-SDR currency is deemed important for the international trade of the country.
Option 2: Currency Composition of International Trade Covering Goods and Services
Year
Goods
Services
Credits
Debits
Credits
Debits
Total
1
Domestic currency
Foreign currency
SDR basket currencies
U.S. dollar
Euro
Chinese yuan
Japanese yen
Pounds sterling
Other currencies
of which
2
: Currency A
of which
2
: Currency B
of which
2
: Currency C
Unallocated
1
Should be equal to balance of payments goods and services account.
2
Report if a non-SDR currency is deemed important for the international trade of the
country.
10
Option 3: Currency Composition of International Trade Covering the Standard Components of Goods and Services
Credit
Year Total
Domestic
currency
Foreign currencies
Unallocated
SDR currencies
Other currencies
U.S.
dollar
Euro
Chinese
yuan
Japan
yen
Pounds
sterling
Currency
A
2
Currency
B
2
Currency
C
2
Total Goods and Services
1
Goods
General merchandise on
a BOP basis
Net exports of goods
under merchanting
Nonmonetary gold
Services
Manufacturing services
on physical inputs owned by
others
Maintenance and repair
services n.i.e.
Transport
Travel
Construction
Insurance and pension
services
Financial services
Charges for the use of
intellectual property n.i.e.
Telecommunications,
computer, and information
services
Other business services
1
Personal, cultural, and
recreational services
Government goods and
services n.i.e.
1
Should be equal to the balance of payments goods and services account.
2
Report if a non-SDR currency is deemed important for the international trade of the country.
11
Debit
Year Total
Domestic
currency
Foreign currencies
Unallocated
SDR currencies Other currencies
U.S.
dollar
Euro
Chinese
yuan
Japan
yen
Pounds
sterling
Currency
A
2
Currency
B
2
Currency
C
2
Total Goods and Services
1
Goods
General merchandise on
a BOP basis
Nonmonetary gold
Services
Manufacturing services
on physical inputs owned by
others
Maintenance and repair
services n.i.e.
Transport
Travel
Construction
Insurance and pension
services
Financial services
Charges for the use of
intellectual property n.i.e.
Telecommunications,
computer, and information
services
Other business services
1
Personal, cultural, and
recreational services
Government goods and
services n.i.e.
1
Should be equal to the balance of payments goods and services account.
2
Report if a non-SDR currency is deemed important for the international trade of the country.
12
Annex II. Supplementary Information
II.1 REFERENCED DOCUMENTS
Adler, G., Casas, C., Cubeddu, L., Gopinath, G., Li, N., Meleshchuk, S., Buitron, C., Puy, D., Timmer,
Y. Dominant Currencies and External Adjustment. IMF Staff Discussion Note 2020/05.
https://www.imf.org/en/Publications/Staff-Discussion-Notes/Issues/2020/07/16/Dominant-Currencies-
and-External-Adjustment-48618
Australian Bureau of Statistics, 2016. International Trade in Goods and Services”.
https://www.abs.gov.au/ausstats/abs@.nsf/Previousproducts/5368.0Feature%20Article1Oct%202016
?opendocument&tabname=Summary&prodno=5368.0&issue=Oct%202016&num=&view=
Boz, E., Casas, C., Georgiadis, G., Gopinath, G., Le Mezo, H., Mehl, A., Nguyen, T., 2020. Patterns
in Invoicing Currency in Global Trade. IMF Working Paper 2020/126.
https://www.imf.org/en/Publications/WP/Issues/2020/07/17/Patterns-in-Invoicing-Currency-in-Global-
Trade-49574
Goldberg, L., Tille, C., 2008. Vehicle-currency Use in International Trade. Journal of International
Economics 76, 177–192.
Gopinath, G., 2015. The International Price System. NBER Working Paper 21646.
IMF, 2009. Balance of Payments and International Investment Position Manual, sixth edition.
https://www.imf.org/external/pubs/ft/bop/2007/pdf/bpm6.pdf
Ito, H., Chinn, M., 2014. The Rise of the “Redback” and the People’s Republic of China’s Capital
Account Liberalization: An Empirical Analysis of the Determinants of Invoicing Currencies. ADBI
Working Paper 473.
Kamps, A., 2006. The Euro as Invoicing Currency in International Trade. ECB Working Paper 665.
United Nations, 2008. The System of National Accounts.
https://unstats.un.org/unsd/nationalaccount/docs/sna2008.pdf
United Nations, 2010. International Merchandise Trade and Statistics.
http://unstats.un.org/unsd/publication/SeriesM/SeriesM_52rev3e.pdf
13
II.2 STUDIES – DATASETS RELATED TO CURRENCY COMPOSITION ON INTERNATIONAL TRADE
Table 1. Studies Related to Currency Composition on International Trade of Goods
Study
Sample
Dataset information
Currency
concept/source
Findings
Boz et. al (2020)
102 countries
The dataset provides information on the
share of trade invoiced primarily in dollars
and in euros, but in many cases also in
domestic currency. The country coverage of
dataset changes over time.
mostly invoicing;
settlement only for
countries for which
information on
invoicing is not
available.
The U.S. dollar has a globally dominant role in invoicing. Both
the U.S. dollar and the euro have been increasingly used for
invoicing, even as the share of global trade accounted for by the
United States and the Euro Area has declined. Moreover, the
euro is used as a vehicle currency in parts of Africa, and some
European countries have seen significant shifts toward euro
invoicing. Countries invoicing more in U.S. dollars (euros) tend to
experience greater U.S. dollar (euro) exchange rate pass-
through to their import prices.
Ito and Chinn
(2014)
50 countries
Updates and expands the dataset
constructed by Goldberg and Tille (2008)
and Kamps (2006), producing longer and
more complete series.
invoicing
Countries with more developed financial markets tend to invoice
less in the U.S. dollar and countries with more open capital
accounts tend to invoice in either the euro or their domestic
currency.
Goldberg and
Tille (2008)
24 countries
The available information varies across
countries and, in some cases, it is not
possible to state whether the data refers to
invoicing or settlement. The United Kingdom
and Australia have detailed information on
currency invoicing for different commodities
and partners countries. Within Asia, detailed
data is available for Japan and Korea. Data
for the United States is drawn from Customs.
Within Europe, ECB efforts have made
available comparable data across many
countries.
invoicing
The determinants of invoice currency choice are industry
features and country size, with some role for foreign exchange
bid–ask spreads. The “coalescing” effect, where exporters
minimize the movements of their prices relative to their
competitors', helps to explain the dominance of the dollar. The
U.S. dollar is important in the invoicing of world trade both
because the United States is an important consumer and
producer in world markets, and various countries peg their
currencies to the dollar.
Kamps (2006)
42 countries
Most data concerning EU countries have
been collected by the European System of
Central Banks (ECSB). Early data for EU
countries and data on non-EU countries was
assembled from different national sources.
invoicing
The currency in which the international trade is invoiced has
micro and macroeconomic implications. At the firm level, the
profit maximization of firms engaged in international trade is
affected by their choice of currency. At the macroeconomic level,
it affects business cycle correlations between countries and the
transmission mechanism of monetary policy.
14
II.3 DATA ALREADY EXISTENT FOR CURRENCY COMPOSITION
Table 2. BIS Triennial Central Bank Survey of Foreign Exchange and Over-the-counter (OTC)
Derivatives Markets in 2019
Source: https://www.bis.org/statistics/rpfx19.htm
Currency distribution of OTC foreign exchange
turnover
Net-net basis,
1
percentage shares of average daily turnover in April
2
Table 2
Currency
2004 2007 2010 2013 2016 2019
Share
Rank
Share
Rank
Share
Rank
Share
Rank
Share
Rank
Share
Rank
USD 88,0 1
85,6 1 84,9 1 87,0 1 87,6 1
88,3
1
EUR 37,4 2
37,0 2 39,0 2 33,4 2 31,4 2
32,3
2
JPY 20,8 3
17,2 3 19,0 3 23,0 3 21,6 3
16,8
3
GBP 16,5 4
14,9 4 12,9 4 11,8 4 12,8 4
12,8
4
AUD 6,0 6
6,6 6 7,6 5 8,6 5 6,9 5
6,8
5
CAD 4,2 7
4,3 7 5,3 7 4,6 7 5,1 6
5,0
6
CHF 6,0 5
6,8 5 6,3 6 5,2 6 4,8 7
5,0
7
CNY³ 0,1 29
0,5 20 0,9 17 2,2 9 4,0 8
4,3
8
HKD³ 1,8 9
2,7 8 2,4 8 1,4 13 1,7 13
3,5
9
NZD³ 1,1 13
1,9 11 1,6 10 2,0 10 2,1 10
2,1
10
SEK 2,2 8
2,7 9 2,2 9 1,8 11 2,2 9
2,0
11
KRW³ 1,1 11
1,2 14 1,5 11 1,2 17 1,7 15
2,0
12
SGD³ 0,9 14
1,2 13 1,4 12 1,4 15 1,8 12
1,8
13
NOK³ 1,4 10
2,1 10 1,3 13 1,4 14 1,7 14
1,8
14
MXN³ 1,1 12
1,3 12 1,3 14 2,5 8 1,9 11
1,7
15
INR³ 0,3 20
0,7 19 0,9 15 1,0 20 1,1 18
1,7
16
RUB³ 0,6 17
0,7 18 0,9 16 1,6 12 1,1 17
1,1
17
ZAR³ 0,7 16
0,9 15 0,7 20 1,1 18 1,0 20
1,1
18
TRY³ 0,1 28
0,2 26 0,7 19 1,3 16 1,4 16
1,1
19
BRL³ 0,3 21
0,4 21 0,7 21 1,1 19 1,0 19
1,1
20
TWD³ 0,4 18
0,4 22 0,5 23 0,5 23 0,6 23
0,9
21
DKK³ 0,9 15
0,8 16 0,6 22 0,8 21 0,8 21
0,6
22
PLN³ 0,4 19
0,8 17 0,8 18 0,7 22 0,7 22
0,6
23
THB⁴ 0,2 22
0,2 25 0,2 26 0,3 27 0,4 24
0,5
24
IDR⁴ 0,1 27
0,1 29 0,2 30 0,2 30 0,2 31
0,4
25
HUF³ 0,2 23
0,3 23 0,4 24 0,4 24 0,3 27
0,4
26
CZK⁴ 0,2 24
0,2 24 0,2 27 0,4 26 0,3 28
0,4
27
ILS⁴ 0,1 26
0,2 27 0,2 31 0,2 29 0,3 29
0,3
28
CLP⁴ 0,1 25
0,1 30 0,2 29 0,3 28 0,2 30
0,3
29
PHP⁴ 0,0 32
0,1 31 0,2 28 0,1 31 0,1 33
0,3
30
AED ... 55
... 57 ... 57 ... 41 ... 39
0,2
31
COP⁴ 0,0 34
0,1 34 0,1 32 0,1 33 0,2 32
0,2
32
SAR⁴ 0,0 33
0,1 33 0,1 33 0,1 34 0,3 26
0,2
33
MYR⁴ 0,1 30
0,1 28 0,3 25 0,4 25 0,4 25
0,1
34
RON⁴ ... 56
0,0 35 0,1 34 0,1 32 0,1 34
0,1
35
OTH 6,6 7,7 4,7 1,7 2,2
2,2
Total
200,0
200,0
200,0
200,0
200,0
200,0
1
Adjusted for local and cross-border inter-dealer double-counting (ie “net-net” basis).
2
Because two currencies are involved in each transaction, the sum of the percentage shares of individual currencies
totals 200% instead of 100%.
3
Turnover for years prior to 2013 may be underestimated owing to incomplete reporting of offshore trading in previous
surveys. Methodological changes in the 2013 survey ensured more complete coverage of activity in EME and other
currencies.
4
Turnover may be underestimated owing to incomplete reporting of offshore trading.
15
CURRENCY COMPOSITION OF OFFICIAL FOREIGN EXCHANGE RESERVES (COFER)
Source: https://data.imf.org/?sk=E6A5F467-C14B-4AA8-9F6D-5A09EC4E62A4
The IMF collects data on member countries and publishes data on reserve assets positions.
According to Currency Composition of Official Foreign Exchange Reserves (COFER), as of the third
quarter of 2020, 60 percent of international reserves are in U.S. dollar, around 21 percent are in euro,
6 percent in Japanese yen, followed by 4 percent in Pounds sterling.
Table 3. Brazil—Debt Claims on/to Nonresidents by Currency Composition
Source: https://www.bcb.gov.br/en/statistics/externalsectorstatistics
Position: September 2020
US$ million
Itemization Central
General Banks
1/
Other sectors Intercompany
Total
Bank
Government
lending
Total
Other
Others
financial
corporations
Total
2/
35
942
14 156
59 631
12 597
47 033
30 592
105 356
Domestic currency -
-
135
1 062
435
627
1 834
3 031
Foreign currency 35
942
14 020
58 569
12 162
46 407
28 759
102 325
U.S. dollar 35
942
10 965
52 319
11 814
40 505
27 006
91 267
Euro -
-
1 726
4 340
76
4 264
1 484
7 550
Yen -
-
27
184
1
183
35
245
Sterling pound -
-
76
356
75
281
29
461
Renminbi -
-
20
39
0
39
2
61
Other currencies -
-
1 206
1 331
196
1 135
203
2 740
Of which one year or less 35
33
13 262
30 070
3 589
26 480
21 566
64 966
Domestic currency -
-
135
114
8
106
637
886
Foreign currency 35
33
13 127
29 955
3 581
26 374
20 929
64 079
U.S. dollar 35
33
10 337
26 503
3 514
22 989
19 769
56 678
Euro -
-
1 722
2 617
50
2 567
978
5 318
Yen -
-
27
176
1
175
29
232
Sterling pound -
-
76
174
6
167
27
277
Renminbi -
-
20
38
0
37
2
59
Other currencies -
-
945
448
10
438
123
1 516
Reserve assets
356 606
In SDR basket
356 601
Not in SDR basket
4
1/ Deposit-taking corporations, except the central bank.
2/ Excluding reserve assets.
16
Table 4. Brazil—Debt Liabilities on/to Nonresidents by Currency Composition
Source: https://www.bcb.gov.br/en/statistics/externalsectorstatistics
Position: September 2020
US$ million
Itemization Central
General
Banks
1/
Other sectors
Intercompany
Total
Bank Government lending
Total Other Others
financial
corporations
Total 4 085
145 651
115 553
112 142
14 901
97 241
244 131
621 561
Domestic currency -
68 149
550
12 008
554
11 454
21 182
101 889
Foreign currency 4 085
77 502
115 003
78 876
14 347
64 529
79 921
355 387
U.S. dollar 21
72 176
113 089
67 029
11 994
55 035
59 010
311 324
Euro -
3 327
637
8 611
540
8 072
16 394
28 969
Yen -
203
554
989
-
989
282
2 028
Sterling pound -
0
396
8
-
8
224
627
Renminbi -
-
-
3
-
3
-
3
Other currencies 4 064
1 796
328
2 236
1 813
423
4 011
12 435
Goods -
-
-
21 258
0
21 258
143 028
164 286
Of which one year or less
2/
21
7
62 711
12 939
4 515
8 424
16 495
92 172
Domestic currency -
-
126
2 918
95
2 823
5 331
8 375
Foreign currency 21
7
62 585
10 021
4 420
5 601
11 163
83 797
U.S. dollar 21
0
61 847
6 998
2 583
4 415
6 323
75 190
Euro -
7
222
989
44
945
4 574
5 791
Yen -
-
189
73
-
73
165
427
Sterling pound -
-
-
0
-
0
81
81
Renminbi -
-
-
-
-
-
-
-
Other currencies -
-
328
1 960
1 793
167
20
2 308
1/ Deposit-taking corporations, except the central bank.
2/ Excludes debt securities traded in the domestic market and held by nonresidents.
Table 5. Republic of Moldova—Structure of Gross External Debt by Currencies and
Institutional Sectors at Period-end (US$ million)
Source: https://www.bnm.md/en/content/statistical-yearbook-international-accounts-republic-moldova-2019
Institutional Sector
Currency
2019
2018
2017
General government
Euro
659,39
544,33
518,31
U.S. dollar
69,1
170,97
170,85
Special Drawing Rights
931
932,05
973,85
Other
58,47
59,01
59,54
Central Bank
Special Drawing Rights
180,51
217,8
264,29
Deposit-taking corporations
Euro
198,14
188,42
185,98
U.S. dollar
91,63
124,33
157,91
Other
17,20
66,69
79,25
Other sectors
Euro
1554,24
1437,26
703,2
U.S. dollar
1641,49
1648,94
1895,48
Other
111,86
83,58
70,3
Direct investment:
intercompany lending
Euro
661,56
613,69
496,92
U.S. dollar
1162,61
1163,67
1185,13
Other
78,88
70,91
72,63
17
II.4 COMPILATION METHODS AND DATA SOURCES
The main data sources for the authors’ compilation of currency composition of international trade on
goods and services are:
(1) Direct reporting is accurate and is used more for collecting data on services than on goods.
Surveys usage is limited for Central Banks and are mostly implemented by Statistical Offices. Surveys
are expensive and usually financed from national budget. Including currencies in surveys will
significantly increase reporters’ burden and may not be supported by national authorities, producers’
associations and economic agents in general. Only a limited number of currencies can be included,
and each one should be important for the national authorities.
(2) The data on invoice currencies for goods can often be collected from customs declarations. These
administrative data are generally accurate, and do not impose much burden on reporters. The
information on countries and groups of goods shall also be available. However, the coverage of data
can be highly different from balance of payments, both because of coverage issues, as shown on
BPM6 Table 10.2, and valuation issues, related to the CIF/FOB terms of delivery treatment (for more
details, see Annex E of 2010 IMTS). Data on all currencies used can be collected. These data do not
cover services.
(3) The settlement currency is available from the ITRS. These data cover goods and services, and
information on countries distribution as well. Limited details on goods or types of services may be
available. Data on all currencies used can be collected. However, the coverage of data can be highly
different from the balance of payments methodology, considering the discussion in paragraphs 11–13.
Considering the statistical adjustments needed for goods, including those done to obtain from IMTS
data the balance of payments goods and other coverage adjustments, the inherent burden on using
surveys and the methodological issues of using settlement data, the compilation of international trade
classified by currency composition should be further treated in the update of the BPM6 Compilation
Guide.
Table 6. Data Sources Availability for Currency Composition on International Trade
Brazil
Moldova
Morocco
Data presentation
Frequency
availability
Source
Frequency
availability
Source
Frequency
availability
Source
Goods/BoP Monthly
Invoice,
Settlement
- - - -
Goods/IMTS Monthly Invoice Monthly Invoice Monthly Invoice
Other coverage of
goods
- - Monthly Settlement Monthly Settlement
Services/BOP Monthly
Settlement,
Survey
- - - -
Other coverage of
services
- - Monthly Settlement Monthly Settlement
18
II.5 COMPARING INVOICE DATA AND SETTLEMENT DATA
Acknowledgment: all figures presented in this section were elaborated on exploratory basis for the
purpose of the current testing exercise. It encompasses calculations based on assumptions where the
detailed data were not available without significantly affecting the quality of the estimates.
Exploratory Exercise – Republic of Moldova
The Republic of Moldova has compared data from custom declaration (invoice) with ITRS and found
quite big differences. For goods exports the difference of currencies shares is higher than
10 percentage points, and the amounts are not comparable for both imports and exports.
Table 7. Currency Distribution, Invoice Versus Settlements, Share in Respective Totals (%)
Invoice (IMTS data with
some recalculations)*
Settlements (ITRS)**
Difference (p. p.)
2016
2017
2018
2019
2016
2017
2018
2019
2016
2017
2018
2019
Exports of goods
Euro
47
51
54
56
41
40
41
53
6
11
13
3
U.S. dollar
50
46
43
41
55
57
53
41
-5
-11
-10
0
Russian ruble
2
2
2
2
2
2
2
2
0
0
0
0
Other
1
1
1
1
1
1
4
4
0
0
-3
-3
Imports of goods
Euro
46
47
47
48
43
43
43
46
3
4
4
2
U.S. dollar
48
49
49
46
52
52
52
48
-4
-3
-3
-2
Russian ruble
4
3
3
3
5
4
4
3
-1
-1
-1
0
Other
1
1
1
2
1
1
1
2
0
0
0
0
Methodological note:
* Invoice – IMTS data (Customs)
Were excluded: (1) goods in kind, (2) goods involved in construction projects, (3) different types of transactions
supplementary to the main transaction (exchange in goods under guarantee), (4) goods included in international aid
programs (or grants), (5) processing, (6) other goods from governmental programs (NP)
No other BOP adjustments were included (e.g. no CIF-FOB, no merchanting, etc.)
** Settlements – ITRS
Were excluded: (1) e-trade, (2) payments in cash
Were included: (1) proc. in ports.
19
Exploratory Exercise – Brazil
Brazil did an exercise comparing invoice data and settlement data for exports of goods of 2019. The
data source for invoice was Customs registers while the settlement data was extracted from an ITRS.
The results, in the next table, show a very large share of U.S. dollar and a better coverage for the
invoice source:
Table 8. Brazil Currency Composition on International Trade of Goods (Invoice x Settlement)
USD million
Year: 2019
Exports of goods
Invoice
Settlement
Total
225 383
192 087
Domestic currency
4 858
4
Foreign currency
220 120
189 392
SDR basket currencies
220 086
189 240
British pound
694
592
Chinese renminbi
-
1
Euro
8 159
7 751
Japanese yen
116
193
U.S. dollar
211 118
180 702
Other currencies
34
152
Unallocated
405
2 691
Exploratory Exercise – Morocco
Morocco conducted the same exploratory exercise comparing currencies shares for international
trade in goods on both imports and exports sides during past two years (2019 and 2020) as resulting
from customs declarations and settlements (ITRS). The table below show results for the USD and
EUR as both covers by far the largest shares of total transactions:
Table 9. Differences in Estimates
Currency
2019
2020
Export
Import
Export
Import
Euro
6,6%
1,3%
5,7%
-1,1%
U.S. dollar
-8,6%
-3,3%
-6,9%
-1,3%
The difference is calculated as currency of denomination (%) - currency of settlement (%). The
exercise reveals an average difference of 7 percent for the two main currencies from export side while
the currency structure seems to be closer for imports.
