New york: The share of US dollars in global reserves is on the decline due to policy uncertainties as countries seek to diversify their reserves.
According to Anadolu Agency, the global reserves surged to $13 trillion in the third quarter of 2025, based on data from the International Monetary Fund (IMF) Currency Composition of Official Foreign Exchange Reserves (COFER). During this period, the share of the dollar in global foreign exchange reserves was 56.92%, a decrease from 58.51% in the first quarter of 2025 and 57.08% in the second quarter of the previous year. Historically, the share of the US dollar in global foreign exchange reserves has been declining from 71.19% at the beginning of 1999.
Meanwhile, the euro’s share increased from 19.12% in the first quarter of 2025 to 20.24% in the second quarter and 20.33% in the third quarter. The Japanese yen’s share also saw fluctuations, decreasing from 5.73% in the first quarter to 5.65% in the second quarter, and then rising to 5.82% in the third quarter. The Chinese yuan experienced a slight increase from 1.96% in the first quarter to 1.99% in the second quarter, only to fall to 1.93% in the third quarter.
The decline of the US dollar in global reserves has raised concerns about its ability to maintain its reserve currency status and its central role in the global monetary system. However, it continues to dominate financial transactions worldwide. The US accounts for approximately 10% of global trade, with more than half of all transactions billed in US dollars. Despite some energy payments shifting to other currencies, the majority of globally traded commodities remain priced in US dollars.
In global payments, the US dollar remains the most widely used currency, accounting for 50.49% of the total in December last year, according to SWIFT data. The euro accounted for 21.9%, the pound sterling for 6.73%, the Canadian dollar for 3.44%, the Japanese yen for 3.42%, and the Chinese yuan for 2.72%.
Reserve managers are actively seeking to diversify reserves, according to Steven Kamin, a senior fellow at the American Enterprise Institute (AEI) and a global macroeconomics expert. Kamin explained to Anadolu that the decline in the US dollar’s reserve share is largely due to reserve managers diversifying with non-traditional currencies like the Canadian or Australian dollar. He noted that countries such as Switzerland, which have grown their reserves, have a lower share of the US dollar compared to other currencies.
Kamin emphasized that while the dollar’s value may be decreasing, it is unlikely that the euro, Chinese yuan, or other currencies will replace the US dollar as the dominant global currency. He expects the US dollar to maintain its leading position in the foreseeable future, even as the global monetary system moves towards a more balanced and multipolar world.
Olu Sonola, head of US economic research at Fitch Ratings, also highlighted to Anadolu that the decline in the US dollar’s global reserve share is linked to policy uncertainty over the past year, including tariff-induced uncertainties, Greenland-related risks, and uncertainties over Japan’s fiscal problems and the US’s potential role in stabilizing them. Sonola noted that the US dollar’s nominal value remains close to the long-term average for a 10-year and even a 50-year period, though variations exist in the margins. He cautioned that this trend may continue if policy uncertainties persist.
Sonola added that the US dollar is unlikely to be replaced in the future due to the deep credit and bond markets in the US, which support the US dollar in the absence of an alternative.