The US dollar is gradually losing ground in global financial reserves as central banks increasingly diversify away from the world’s primary reserve currency towards gold, according to recent international data.
At present, the dollar accounts for around 46 percent of global foreign exchange and gold reserves, marking its lowest level in at least 26 years. Since Donald Trump took office as US President, the dollar hasn’t done well enough for central banks to retain it.
Trust (and maybe gold) has become a more valuable and rare commodity than the greenback with the Gulf War likely to resume in the coming weeks. Trump’s team was unable to get a full deal done in Islamabad to end the war against Iran.
ProPakistani reported in end-March that the dollar accounted for 57 percent of the total global reserves. Since then, the global US Dollar-to-Reserve ratio has dropped by a staggering 1,100 basis points in almost two weeks.
Also, it represents a decline of approximately 1,500 percentage points since 2017.
When gold is excluded from the calculation, the dollar still holds about 57 percent of global reserve currencies, based on recent International Monetary Fund (IMF) data.
The shift comes amid a broader trend of central banks increasing gold purchases while also expanding holdings in alternative currencies, reflecting a gradual move toward diversification in global reserve management.
Historically, the last time the dollar’s share dropped below the 50 percent mark was during 1990–1991, when inflation was high, recession a menace, and poor economic outlooks everywhere.