Key Takeaways
- The dollar’s share of global foreign exchange reserves fell to around 56% in 2025, its lowest level in roughly three decades.
- New research from the New York Fed suggests the decline is concentrated among a relatively small group of large reserve holders rather than reflecting a worldwide exit from dollar assets.
- IMF data also show currency valuation effects can significantly exaggerate apparent changes in reserve allocations.
The US dollar’s share of global foreign exchange reserves has fallen to levels not seen in around three decades, adding fuel to claims that central banks are accelerating their retreat from the world’s dominant reserve currency.
But new analysis suggests the claims may overstate the scale of de-dollarization.
The dollar accounted for roughly 56% of global official foreign exchange reserves in 2025, down from 64% in 2015, according to data cited by researchers at the Federal Reserve Bank of New York.
That is a substantial decline over a decade. However, the New York Fed found little evidence that it represents a coordinated or broad-based move by central banks away from dollar assets.
Instead, a handful of major reserve holders appear to account for much of the shift.
Few Countries Are Driving the Dollar’s Decline
New York Fed researchers examined how individual countries changed the currency composition and overall size of their reserves.
Between 2019 and 2023, 62 countries with complete data actually increased their dollar allocations slightly when changes in portfolio preferences were isolated.
The bigger drag came from a small group of large reserve holders for which complete 2023 currency composition data was unavailable: China, Russia, Mexico, and Morocco.
Those countries held reserves roughly as large as the combined reserves of the remaining 62-country sample. Under the researchers’ assumptions, reconciling country-level data with the overall IMF decline, the four accounted for virtually all of the negative shift in dollar preferences during that period.
China and Russia were identified as particularly important contributors.
That complicates the idea of a uniform global de-dollarization movement. Some governments may be actively reducing dollar exposure, but the behavior is far from universal.
Reserve Data Can Make Dollar Selling Look Bigger
There is another problem with interpreting the headline reserve share: exchange rates.
IMF data showed the dollar’s share of allocated reserves falling from 57.79% in the first quarter of 2025 to 56.32% in the second quarter.
On the surface, that looked like a 1.47 percentage-point decline.
But the IMF calculated that exchange-rate movements accounted for 92% of that drop. Holding exchange rates constant, the dollar’s share would have declined only marginally, to 57.67%.
The effect occurs because the IMF reports reserves in dollar terms. When currencies such as the euro appreciate against the dollar, the dollar value of euro-denominated reserves rises even when central banks have not purchased additional euros.
The latest data provides another example. The dollar’s reserve share increased to 57.13% in the first quarter of 2026 from 56.42% in late 2025, with the IMF attributing around half of the increase to exchange-rate effects.
Dollar Dominance Is Eroding, Not Disappearing
None of this means de-dollarization is imaginary.
Central banks have increasingly diversified into gold and smaller reserve currencies, while geopolitical tensions have encouraged countries, including China and Russia, to reduce their dependence on US-controlled financial infrastructure.
But no single currency has emerged as an obvious replacement.
The euro accounted for about 20% of global reserves in the first quarter of 2026, while China’s renminbi represented just 1.99%, according to the IMF.
The result is a more fragmented reserve system rather than a straightforward transfer of dominance from the dollar to another currency.
The dollar’s grip on global reserves is clearly weaker than it was two decades ago. But the latest data suggests the more dramatic claim that central banks worldwide are collectively abandoning it is much harder to support.
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Dr. Guneet Kaur is a senior editor at CCN.com and a Science Fellow at Exponential Science. She is a fintech and blockchain expert with extensive experience in digital finance education, blockchain ecosystems, and cryptocurrency markets. She has worked with global media such as Cointelegraph, as well as education and blockchain platforms, to design and lead strategic content and learning initiatives. As an educator and assessor for top-tier executive programs, she bridges real-world fintech trends with academic insight.
Dr. Kaur is also a published researcher and peer reviewer across fintech and data science journals, including Financial Innovation Journal and International Journal of Big Data Intelligence and Applications. Her work spans data-driven analysis, Web3 innovation, and technical content development. With a strong foundation in both industry and academia, she translates complex financial technologies into practical applications, empowering learners, professionals, and institutions across the rapidly evolving digital finance landscape.
