TL;DR
IMF data show the dollar's share of central-bank foreign exchange reserves fell to 56.9% in Q3 2025, the lowest level since 1994. The decline reflects growing allocations to many smaller, 'non‑traditional' reserve currencies even as total dollar holdings in dollar terms rose slightly to $7.41 trillion.
What happened
New IMF currency-composition data for Q3 2025 show that assets denominated in US dollars accounted for 56.9% of official foreign-exchange reserves, down from 58.5% in Q1 and 57.1% in Q2. The amount of USD-denominated assets held by foreign central banks edged up to $7.41 trillion, but because reserves in other currencies have risen faster, the dollar's percentage share has fallen to its lowest level since 1994. Central banks have been broadening their holdings into dozens of smaller or 'non‑traditional' reserve currencies, whose combined share climbed to about 5.6%, roughly on par with the yen’s share. The euro remains the second-largest reserve currency, with holdings of $2.65 trillion and a share near 20% since 2015. The renminbi’s share has declined since Q1 2022 and sits back near its 2019 position.
Why it matters
- A declining reserve share reduces the automatic demand boost for USD-denominated securities, which has historically helped lower US borrowing costs.
- If the trend continues, it could complicate financing of US trade and budget deficits by reducing foreign appetite for US debt instruments.
- Broader diversification by central banks into many smaller currencies signals a shift in reserve-management strategies that could alter global liquidity patterns.
- Changes in reserve composition can affect exchange-rate dynamics and yields on major sovereign debt markets.
Key facts
- USD share of official foreign-exchange reserves: 56.9% in Q3 2025 — the lowest since 1994.
- Quarterly trajectory in 2025: 58.5% in Q1, 57.1% in Q2, 56.9% in Q3.
- Foreign central banks’ holdings of USD-denominated assets rose slightly to $7.41 trillion in Q3.
- Total foreign-exchange reserves across currencies stood at about $13.0 trillion in Q3 2025.
- Euro-denominated holdings: $2.65 trillion; euro’s share has been roughly 20% since 2015.
- Yen holdings: $0.76 trillion (about a 5.8% share); non‑traditional smaller currencies combined reached about 5.6%.
- Chinese renminbi holdings totaled $0.25 trillion and have declined since Q1 2022 to levels near 2019.
- Since mid-2014, holdings of USD-denominated assets by foreign central banks have been essentially flat in dollar terms.
What to watch next
- Whether the dollar's reserve share continues to fall toward or below 50% in coming quarters — not confirmed in the source.
- IMF COFER updates for Q4 2025 and beyond to see if the diversification trend accelerates or reverses — not confirmed in the source.
- Shifts in central-bank purchases of USD-denominated securities versus other assets, and any policy signals from major reserve managers — not confirmed in the source.
Quick glossary
- Reserve currency: A currency held by central banks as part of their foreign-exchange reserves, used for international payments and to back liabilities.
- Foreign-exchange reserves: Assets held by central banks in different currencies, often including government bonds, deposits, and other liquid instruments.
- IMF COFER: The IMF’s Currency Composition of Official Foreign Exchange Reserves database, which reports how reserves are distributed across currencies.
- Non-traditional reserve currencies: A group of smaller or less-established currencies that central banks have added to their reserve portfolios alongside major currencies.
- US Treasury securities: Debt instruments issued by the US government, commonly held as safe, liquid assets in many central-bank reserve portfolios.
Reader FAQ
Did foreign central banks sell off dollar assets in Q3 2025?
No. The source reports they added slightly to their USD-denominated holdings; the decline was driven by faster growth in other currency holdings.
How large are global foreign-exchange reserves in total?
About $13.0 trillion in Q3 2025, according to the IMF data cited in the source.
Is the euro gaining on the dollar?
The euro remains the second-largest reserve currency with about $2.65 trillion in holdings and a share near 20% since 2015; further gains are not detailed in the source.
Does this mean the dollar will lose its reserve status?
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 …
- Status of the US Dollar as Global Reserve Currency
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