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An employee of the Korea Exchange Bank counts one hundred dollar notes at the bank's headquarters in Seoul November 2, 2009. REUTERS/Choi Bu-Seok

LONDON (Reuters) - The dollar's edge as the world's leading reserve currency will be chipped away only slowly, and it is likely to remain dominant for many years, a Reuters poll of foreign exchange strategists showed.

The dollar makes up an estimated 63 percent of central banks' global exchange reserves at present. The ratio has been falling gradually from above 70 percent in 1999, when the euro was introduced.

The Reuters poll of 34 strategists shows them giving a median forecast for the dollar to make up 60 percent of reserves five years from now, 55 percent in ten years, and 48 percent after 20 years.

That is in line with a Reuters poll in April which saw the dollar making up around 55 percent of reserves in 2020.

Some central banks have been putting a larger fraction of incoming reserves into currencies other than the dollar partly because of concern about the dollar's long-term stability. China has suggested that the dollar eventually be replaced as the main currency for global reserves.

But the unmatched depth and liquidity of U.S. financial markets means the shift away from the dollar will remain very slow, strategists in the poll said.

"It will take decades for another capital market to be built as deep as is currently available in the U.S. Accordingly, this is a slow trend that will play out over many years," said Camilla Sutton at Scotia Capital.

YUAN

The survey also suggested that despite China's growing economic power, the yuan is still a long way from becoming a major reserve currency.

Of 35 strategists who discussed the yuan, 15 said the yuan would not reach this status for five to ten years, while 13 said it would take more than ten years.

Two predicted the yuan would become a reserve currency in just two years, while five estimated between two and five years.

Central banks appear unlikely to embrace the yuan unless China eases capital controls and makes its currency more freely tradable.

"China still has to deliver another revaluation of about 2 to 3 percent and extend the period of yuan-based payments with its trading partners before easing FX controls," said Ashraf Laidi at CMC Markets.

(Polling by Bangalore Polling Unit; Editing by Victoria Main)