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Status of US Dollar as Global Reserve Currency: USD Share Drops to 31-Year Low as Central Banks Diversify into Other Currencies & Gold

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The spike of the “non-traditional reserve currencies.” By Wolf Richter for WOLF STREET. Foreign central banks have not been dumping US-dollar-denominated assets. But they’ve been loading up on assets in other currencies, and their total holdings of foreign exchange reserves have ballooned, while their USD-assets have remained nearly flat for over 10 years. So the share of USD-denominated exchange ...
The strongest version of this narrative highlights a gradual but significant shift in global reserve currency dynamics, driven not by a collapse in confidence in the dollar but by strategic diversification. Central banks are not dumping USD assets but are increasingly allocating reserves to other currencies, including smaller "non-traditional" ones, as well as gold. This reflects pragmatic risk management rather than ideological rejection of the dollar. The dollar's declining share is a structur...