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The international monetary system

International reserve accumulation by monetary authorities constituted the most prominent macroeconomic policy shift of the late 1990s. Accumulated reserves increased from 5.9 per cent of world gross product, or $1.9 trillion in 2000, to 14.4 per cent of world gross product or $9.3 trillion in 2010. As a share of global trade volume, reserves passed 51 per cent in both 2009 and 2015. However, since 2014 the process of accelerated reserve accumulation stopped, mirroring the decline in capital inflows. Reserves in developing and transition economies declined by $474 billion in aggregate in 2015. There is no single explanation for reserves accumulation that applies to all countries at all times. It remains to be seen whether this is a temporary interruption of the trend or a permanent change.