BUZZ-COMMENT-Rise for world's reserve currency far from over

Jan 16 (Reuters) - President-elect Donald Trump's pick for Treasury secretary, hedge fund manager Scott Bessent, has vowed to maintain the dollar's status as the world's reserve currency, which should see it add the massive gains it has made since 2011 that saw it reach an 18-year high last month.

The influence of central banks that hold more than $12 trillion in reserves is enormous, and 58%, or almost $7 trillion, of the foreign currencies held by central banks are dollars.

There has been some notable growth for Swiss reserves, of which 39% are dollars which have more than tripled to 716 billion francs, and topped CHF 1 trillion in 2021. India's reserves have more than doubled from $300 billion to $685 billion.

While these are eye catching, there has been a general trend to accumulate a lot of dollars, especially in Asia, and it is there that a number of currencies have fallen to, or toward, record lows - including China's yuan, Indian rupee, Indonesian rupiah, Malaysian ringgit, Philippine peso, Brazilian real, South African rand, and on a trade-weighted basis, Japan's yen.

Growing interventions to slow the dollar's rise will continue to fuel its gains versus influential currencies like the euro, pound and yen, if central banks continue to maintain the size of their reserves, which they do by purchasing dollars versus the most liquid currencies of major nations.

In an environment where both techs and fundamentals favour the dollar, which is considered safe and is supported by a fairly attractive interest rate, the pace of the dollar's rise could accelerate as more currencies plunge into uncharted waters.

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(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

((jeremy.boulton@thomsonreuters.com))