According to the IMF’s Q3 2024 COFER data, the USD now accounts for 57.4% of global foreign exchange reserves, down from 66% in 2015. This trend underscores central banks’ growing diversification into other currencies and assets like gold.

The Numbers Behind the Decline

• Current Reserve Holdings (USD): $6.77 trillion out of a total $12.7 trillion in foreign exchange reserves.
• Top Competitors:
  • Euro: 20.0% of reserves
  • Japanese Yen: 5.8%
  • British Pound: 5.0%
  • “All Other Currencies” Combined: 4.5%
  • Chinese Renminbi: 2.2%

Despite this, foreign holdings of U.S. Treasury securities hit a record $8.67 trillion, highlighting that central banks are diversifying rather than abandoning the dollar outright.

The Rise of Nontraditional Reserve Currencies

A growing portion of global reserves now includes so-called “nontraditional reserve currencies” like the Australian and Canadian dollars. Their share has surged since 2020 as central banks seek higher yields and increased liquidity in alternative assets.

Gold as a Reserve Asset

While not classified as a foreign exchange reserve, central banks have ramped up gold holdings, reaching 1.16 billion troy ounces (worth approximately $3.08 trillion). This marks a significant shift after decades of gold sell-offs, reflecting a renewed interest in the metal as a hedge against currency risk.