TreasureX Researchfed.blogThe Dollar's Reserve Role: A Few Big Players, Not a Global Retreat
Linda S. Goldberg, Oliver Hannaoui, and Sneha Parthasarathy · September 2, 2026
Headlines often warn that the U.S. dollar is losing its grip as the world's reserve currency. The numbers seem to support that story: the dollar's share of global official foreign exchange reserves slipped from about 64% in 2015 to roughly 56% in 2025. But a new analysis from the Federal Reserve Bank of New York argues that this aggregate figure is misleading.
When researchers look country by country instead of at the global total, the picture changes. The decline is not a broad, coordinated move by central banks away from dollar assets. Instead, it is driven by a small number of very large reserve holders that either shifted their currency preferences or simply shrank (or grew) the overall size of their reserve portfolios. For the typical country holding dollar reserves, the dollar's position in official portfolios looks largely unchanged.
Why it matters: if the dollar's reserve status is stable across most countries, then fears of a rapid erosion of dollar dominance — and the associated risks for U.S. borrowing costs, Treasury demand, and currency markets — may be overstated. For investors, this suggests that the dollar's role in global finance remains durable, even as a handful of giants adjust their holdings. Watching who those large holders are, and why they move, matters more than the headline percentage.
This article is based on research from Liberty Street Economics, Federal Reserve Bank of New York: https://libertystreeteconomics.newyorkfed.org/2026/09/are-central-banks-moving-out-of-dollar-assets/
Educational content only, generated with AI assistance from public research abstracts. Not investment advice.