The US dollar\u2019s share of global foreign exchange reserves continued\nto decline in the fourth quarter of 2025, as the yuan and other\ncurrencies gradually expanded their roles.<\/p>\n
The latest data from the International Monetary Fund (IMF) in its\nCurrency Composition of Official Foreign Exchange Reserves (COFER)\nreport shows that the share of global reserves denominated in US dollars\nfell to 56.77% in Q4 2025, down from 56.93% in Q3 2025.<\/p>\n
Over the course of 2025, the trend indicates a weakening role for the\ndollar in the composition of global reserves. In Q1 2025, the dollar\u2019s\nportion was still around 57.79%, then it dropped sharply to 56.32% in Q2\n2025, before fluctuating around 56.9% in the second half of the year and\nclosing at 56.77%.<\/p>\n
At this level, the dollar\u2019s share is at its lowest point since the\nmid-1990s, signalling that while the greenback\u2019s dominance remains\nsignificant, it is being steadily eroded.<\/p>\n
US dollar-denominated foreign exchange reserves include various\nfinancial instruments held by central banks worldwide, from US\ngovernment debt securities or US Treasury securities, US government\nagency debt, mortgage-backed securities (MBS), US corporate bonds, to\nother dollar-denominated assets.<\/p>\n
In other words, the decline in the dollar\u2019s share in global foreign\nexchange reserves does not equate to central banks dumping dollar cash\nen masse, but rather reflects changes in the composition of their\nreserve portfolios.<\/p>\n
Meanwhile, total global foreign exchange reserves in the same period\nactually rose to US$13.14 trillion from US$13.03 trillion in the\nprevious quarter.<\/p>\n
The Dollar Is Not Being Dumped, But Its Share Is Continuously\nEroded<\/p>\n
A key point from the IMF data is that the decline in the dollar\u2019s\nshare is not caused by large-scale selling of dollar-denominated\nassets.<\/p>\n
On the contrary, nominal ownership of dollar assets remains large and\neven increased in some periods, but the growth is far slower than the\naddition of assets in other currencies.<\/p>\n
The IMF also emphasises that in Q4 2025, the influence of exchange\nrate valuations on changes in reserve composition was relatively small,\nso the decline in the dollar\u2019s portion more accurately reflects the\nongoing direction of diversification.<\/p>\n
This situation has actually been evident in recent years.<\/p>\n
The US Federal Reserve (The Fed) in its study The International Role\nof the U.S. Dollar - 2025 Edition notes that the dollar still accounts\nfor about 58% of global official foreign exchange reserves in 2024, far\nabove the euro, yen, pound sterling, and yuan.<\/p>\n
However, The Fed also underlines that the decline in the dollar\u2019s\nshare from its peak is not primarily shifting to one main rival, but\nrather because global reserve managers are increasing exposure to\nvarious smaller currencies.<\/p>\n
On the other hand, the euro remains the world\u2019s second-largest\nreserve currency. The euro\u2019s share in Q4 2025 was 20.25%, slightly down\nfrom 20.36% in Q3 2025.<\/p>\n
Meanwhile, the Chinese yuan\u2019s share rose slightly to 1.95% in Q4 2025\nfrom 1.92% in the previous quarter, but overall it is still far from the\nlevel once hoped to be a main competitor to the dollar.<\/p>\n
Although the yuan\u2019s role in global foreign exchange reserves is still\nrelatively small, China\u2019s currency is increasingly entering\ninternational market discussions, particularly due to its potential in\ncross-border trade, energy transactions, and the emergence of the term\n\u201cpetroyuan\u201d.<\/p>\n
Attention to the yuan has strengthened again amid the war still\nshaking the Middle East and the strategic shipping route of the Strait\nof Hormuz.<\/p>\n
Several market reports highlight that if energy trade access in the\nregion becomes increasingly linked to the use of currencies other than\nthe US dollar, then the dollar\u2019s dominance in oil transactions could\nface new pressures. Nevertheless, this process is still very early and\ncannot yet be called a permanent change in the global trading\nsystem.<\/p>\n
Non-Traditional Currencies Gain Greater Role<\/p>\n
Non-traditional currencies are also playing an increasingly larger\nrole in global foreign exchange reserves. This portion has actually\nbecome one of the most interesting data points from the IMF\u2019s latest\nrelease.<\/p>\n
In Q4 2025, the share of the group of other currencies outside those\nrecorded separately in the COFER data rose to 6.13%, from 5.61% in Q3\n2025.<\/p>\n
The IMF notes that the share of this currency group has been\ncontinuously increasing since 2021 and is now more than double. This\nshows that global central banks are not only adding reserves in euros or\nyuan, but also beginning to spread their foreign exchange holdings to\nmore currencies that were previously not very dominant in the global\nfinancial system.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/imf-reveals-shocking-fact-the-world-begins-to-punish-america-1774878758", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }