The US dollar’s share of global foreign exchange reserves has fallen to its lowest level this century, according to the latest Currency Composition of Official Foreign Exchange Reserves (COFER) data released by the International Monetary Fund IMF) for the fourth quarter of 2025.
The current share is the lowest since 1994 (roughly 31 years).
The dollar accounted for roughly 56.8 percent of allocated global reserves by different central banks, down big from nearly 71 percent in 2001.
“While the US currency remains by far the dominant reserve asset, the IMF data shows a slowly growing long-term diversification trend among central banks worldwide. Pakistan can do well here by diversifying much of its reserve pot with precious metals such as even more gold,” a former bank operations chief told ProPakistani.
Still, no single currency has replaced the dollar’s position. Instead, many central banks have spread allocations across multiple alternatives.
The Euro’s share stands near 20–21 percent, while smaller gains have been recorded by the Japanese yen, British pound, Chinese yuan, and commodity-linked currencies such as the Canadian and Australian dollars, along with the Swiss franc.
All of this is due to central banks sharply increasing their gold reserves, which is not counted as foreign currency but emerged as a preferred diversification asset inn the past decade.
Official gold purchases by central banks worldwide have exceeded 1,000 tons annually for three consecutive years, an unprecedented trend.
Many people on X have said this started to accelerate after the freezing of roughly $300 billion in Russian central bank reserves in 2022.
Despite the decline, the dollar’s global role still remains unmatched due to the depth of US financial markets and continued demand for US Treasury securities.
The trend is being viewed not as a sudden collapse of dollar dominance but as a slow transition toward a more diversified and multipolar reserve system, with gold and multiple currencies collectively taking advantage.