TL;DR
IMF data for Q3 2025 show the dollar’s share of global foreign exchange reserves fell to 56.9%, the lowest reading since 1994. Central banks did not sell large amounts of dollar assets; rather they expanded holdings in other currencies, including dozens of smaller 'non‑traditional' currencies.
What happened
The IMF’s latest Currency Composition of Official Foreign Exchange Reserves for Q3 2025 reports that USD‑denominated assets comprised 56.9% of official reserves, down from 57.1% in Q2 and 58.5% in Q1. Measured in dollars, central banks held about $7.41 trillion in USD assets as of Q3, while total reserves across all currencies rose to roughly $13.0 trillion. The decline in the dollar’s percentage share reflects growth in reserves denominated in other currencies rather than large-scale disposals of dollar assets: foreign official holdings of USD instruments have been essentially flat since mid‑2014 and inched up slightly in the most recent quarter. The euro has remained around a 20% share since 2015; the combined pile of many smaller “non‑traditional” reserve currencies has gained share and reached about 5.6%, nearly matching the yen’s roughly 5.8%. The IMF data also show the renminbi’s share has slipped from its peak and returned to levels seen in 2019, a trend the report links to capital‑control and convertibility issues.
Why it matters
- Reserve composition affects global demand for USD‑denominated assets; weaker relative demand can influence US borrowing costs over time.
- The dollar remains the single largest reserve currency, but rising diversification means other currencies collectively exert more influence.
- Growth in many smaller reserve currencies signals a shift in how central banks diversify risk rather than a mass selloff of dollar assets.
- A sustained decline in the dollar’s reserve share could complicate financing of the US trade and budget deficits by reducing foreign appetite for USD debt.
Key facts
- USD share of official foreign exchange reserves: 56.9% in Q3 2025 (lowest since 1994).
- USD share by quarter: 58.5% in Q1, 57.1% in Q2, 56.9% in Q3 (2025).
- Foreign official holdings of USD‑denominated assets: about $7.41 trillion in Q3 2025.
- Total foreign exchange reserves across all currencies: about $13.0 trillion in Q3 2025.
- Euro‑denominated assets: approximately $2.65 trillion (around a 20% share since 2015).
- Yen assets: about $0.76 trillion; pound sterling assets: about $0.58 trillion.
- Canadian dollar: $0.35 trillion; Australian dollar: $0.27 trillion; Chinese renminbi: $0.25 trillion.
- Non‑traditional reserve currencies combined reached roughly 5.6% of reserves, just below the yen’s ~5.8%.
- Central banks’ holdings of USD assets have been largely unchanged on net since mid‑2014, with only slight increases in recent quarters.
What to watch next
- Upcoming IMF quarterly updates to the Currency Composition of Official Foreign Exchange Reserves for signs of continued diversification or reversal — not confirmed in the source.
- Trends in demand for US Treasury and other USD‑denominated securities and any impact on yields and borrowing costs — not confirmed in the source.
- Future trajectory of the Chinese renminbi’s reserve share and whether capital‑control or convertibility changes alter that trend — not confirmed in the source.
Quick glossary
- Reserve currency: A currency held in significant quantities by governments and institutions as part of their foreign exchange reserves, used for international transactions and as a store of value.
- Foreign exchange reserves: Assets held by central banks in foreign currencies, often including government bonds, deposits, and other liquid financial instruments.
- Currency composition of reserves: The breakdown of a country’s or the world’s official foreign exchange reserves by the currencies in which those assets are denominated.
- US Treasury securities: Debt instruments issued by the US government, commonly held by foreign central banks as part of their USD reserves.
- Non‑traditional reserve currencies: A group of smaller or less commonly held currencies that together can make up a growing share of official reserves, as labeled by the IMF.
Reader FAQ
Did central banks sell off large amounts of US‑dollar assets?
No. According to the IMF data cited, holdings of USD‑denominated assets increased slightly to about $7.41 trillion in Q3; the drop in percentage share reflects faster growth in other currencies.
Is the dollar no longer the dominant reserve currency?
Not confirmed in the source that dominance has ended; the dollar remains the largest single reserve currency, though its share has declined and others have gained collectively.
Has the renminbi been gaining reserve share?
The source reports the renminbi’s share has fallen since Q1 2022 and returned to roughly its 2019 level, citing capital‑control and convertibility-related issues.
Will this development force changes to US fiscal policy?
Not confirmed in the source.
Status of the US Dollar as Global Reserve Currency: USD Share Drops to Lowest since 1994 by Wolf Richter • Dec 26, 2025 • 64 Comments Central Banks diversify their holdings into dozens of…
Sources
- USD Share as Global Reserve Currency Drops to Lowest Since 1994
- Status of the US Dollar as Global Reserve Currency: USD …
- US Dollar Share of Global Foreign Exchange Reserves …
- IMF reserve data shows stabilisation in third quarter
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