Asian central banks increase reserve management sophistication

"In 2003 and 2004 we had large-scale purchasing of the dollar even though it fell, so Asian central banks were doing a lot of heavy lifting," said Piron. He added that this indicates that central banks tend to hold US dollar for the long term.

He noted that reserves held by emerging economy central banks overtook those of developed nations in 1996. Since then, Asian nations have been accumulating reserves at double-digit rates. In 2003 and 2004, Asian central banks bought above and beyond the