The US dollar's share of global foreign exchange reserves rose to 57.13% in the first quarter of 2026, up from 56.42% in the final quarter of 2025, according to the IMF's Currency Composition of Official Foreign Exchange Reserves report.
However, the increase was largely driven by valuation effects. Roughly half of the gain came from the dollar appreciating against other currencies rather than central banks actively purchasing additional dollar assets.
Global foreign exchange reserves declined slightly to $13.10 trillion in Q1 2026, down from $13.15 trillion in the prior quarter.
A Long-Term Shift Away from Dollars
The dollar's dominance has eroded significantly over the past quarter-century. The currency commanded roughly 71% of global reserves around 1999 and 2000, compared to its current 57% share—a decline of approximately 14 percentage points.
According to a survey by OMFIF of 90 central banks and sovereign institutions as of June 2026, a majority of respondents indicated plans to reduce their dollar allocations over the coming decade, citing rising political risks as the primary driver.
Central Bank Diversification and Gold's Rise
Central banks have diversified their reserve holdings in recent years. Gold purchases have remained elevated, and by 2025, gold surpassed US Treasuries as the top reserve asset held by central banks globally. Gold carries no counterparty risk, cannot be sanctioned, and does not depend on the fiscal credibility of any single government.
The euro remains the second-largest reserve currency by a significant margin. China's renminbi, despite years of internationalization efforts, continues to hold a relatively small portion of global reserves.
Cryptocurrencies and digital tokens remain absent from official reserve figures. Despite industry arguments about Bitcoin's properties as a store of value or neutral reserve asset, institutions managing sovereign reserves have not adopted them.
