Are Central Banks Moving Out of Dollar Assets?

The dollar's share of global official foreign exchange reserves fell from 64 percent in 2015 to 56 percent in 2025, a decline that is sometimes read as evidence that the dollar's role in international financial markets is eroding. However, a September 2, 2026 analysis from the Federal Reserve Bank of New York's Liberty Street Economics argues that aggregate statistics obscure the composition of changes occurring at the country level. The authors show that the aggregate decline is not a systematic global shift away from dollar assets, but rather reflects the actions of a handful of large reserve holders changing either their currency preferences or the size of their reserve portfolios. From the perspective of the cross section of countries holding dollar assets, the dollar's status in official portfolios is largely intact.

The mechanics behind the aggregate decline can be separated into two channels. The first is the "preferences channel," in which countries actively reallocate their existing portfolios away from dollar assets and toward other currencies. The second is the "reserve change channel," in which countries accumulate or decumulate new foreign exchange reserves at dollar shares different from the global average. When a country with below-average dollar holdings expands its reserves, it mechanically pulls down the global aggregate even without reducing its own allocation to dollars. The analysis examines two distinct periods selected for availability of data on individual country composition of foreign exchange reserves: from 2015 to 2019, when the dollar share fell by 3 percentage points, and from 2019 to 2023, when the decline moderated to 2 percentage points.

The evidence against a broad-based shift is found in the directional changes across countries. During both four-year windows, roughly equal numbers of countries increased and decreased their dollar holdings, suggesting no dominant cross-sectional shift away from dollars. For the 2015-19 period, the analysis examines the reserve portfolios of seventy-nine countries, of which seventy-six have complete data for the beginning and end of the period. For these seventy-six countries, the aggregate decline was split almost evenly between the preferences and reserve change channels, which accounted for 1.2 and 1.5 percentage points of the decline, respectively. These figures represent the net sum of positive and negative country-level contributions within each channel, and examining those underlying contributions reveals that the aggregate picture masks a high degree of concentration.

The concentration of the decline has significant implications for how market participants should interpret reserve data. During the 2015-19 period, China and Russia dominated the preferences channel, accounting for most of the 1.2 percentage point decline attributed to active portfolio reallocation away from the dollar. Turkey, Peru, and Spain also contributed downward pressure, though their magnitudes were much smaller, at around negative 0.2 percentage point each, while Sweden and Switzerland increased their dollar portfolio shares. The reserve change channel shows a similar degree of concentration, with Switzerland emerging as the largest negative mechanical contributor to the dollar share of reserves through this channel over the specific period. This means that the global aggregate is heavily influenced by a small number of large reserve holders making choices specific to their own circumstances, rather than a coordinated or widespread move away from dollar assets.

The analysis has limitations that warrant caution. The evidence is drawn from a single source read in full, and the periods examined are constrained by the availability of data on individual country composition of foreign exchange reserves. The dossier does not provide complete data for the 2019-23 period at the country level, nor does it detail the full set of countries contributing to the reserve change channel beyond the examples cited. What remains to be watched is whether the concentration of the decline persists in future periods, whether additional large reserve holders alter their currency preferences, and whether the reserve change channel continues to exert mechanical downward pressure on the dollar's aggregate share. The key takeaway from the available evidence is that the headline decline from 64 percent to 56 percent should not be interpreted as a signal that the dollar's role in official portfolios is broadly eroding.