Dollar's reserve currency share declines, still dominant
The US dollar's share in global foreign exchange reserves has declined over the past decade, according to recent figures from De Nederlandsche Bank and the IMF. Despite this shift, the dollar remains the most important reserve currency globally.
Dollar's shrinking footprint
The US dollar's share in global foreign exchange reserves has fallen from 57 percent in 2016 to 40 percent by the end of 2025, according to DNB and IMF figures.
Despite this decline, the dollar remains the most important reserve currency.
The euro's share has remained stable at 14 percent.
Gold has become the second most important reserve asset, reaching 25 percent of total reserves by late 2025, driven by price increases.
Global gold reserves have risen 20 percent since 2009, from 30,500 to over 36,500 tonnes, with China and Russia significantly increasing their holdings.
Smaller currencies, such as the Australian and Canadian dollars and the Swiss franc, collectively account for 4 percent of reserves in 2025, reflecting a broader diversification trend.
The rationale for reserve shifts
Foreign exchange reserves serve as a stabilizing factor for economies, facilitating international payments and buffering against currency pressures.
Their allocation across currencies reflects active portfolio decisions and exchange rate dynamics.
The United States benefits from the dollar's global dominance, particularly in international trade, which underpins its value and confidence.
The US holds limited reserves, primarily in euro and Japanese yen, with the euro's share in US holdings rising from 59 percent in 2016 to 69 percent in 2025.
Gold is increasingly valued as a safe haven, offering protection against financial system shocks in uncertain periods.
Beyond dollar hegemony
The observed diversification of global reserves, while gradual, marks a notable shift away from an over-reliance on the US dollar.
This trend, driven by both strategic portfolio decisions and the search for safe havens like gold, suggests a more multipolar financial landscape emerging.
However, the dollar's enduring dominance means any immediate, dramatic upheaval of the current system remains unlikely.