The dollar's portion of worldwide official foreign exchange reserves dropped from 64 percent in 2015 to 56 percent in 2025, but that decline doesn't reflect a systematic global movement away from American currency, according to a report published September 2 by researchers at the Federal Reserve Bank of New York. Instead, the aggregate numbers mask what's really happening: a handful of large reserve holders, particularly China and Russia, changed their currency preferences or reserve portfolio sizes while most countries left their dollar allocations essentially unchanged. The authors write that "from the perspective of the cross section of countries holding dollar assets, the dollar's status in official portfolios is largely intact."
The report examined seventy-nine countries from 2015 to 2019 and found that roughly equal numbers of countries increased and decreased their dollar holdings during that four-year window. From 2015 to 2019, the dollar share fell by 3 percentage points, split almost evenly between what researchers call the "preferences channel"—countries actively reallocating away from dollars—and the "reserve change channel"—countries expanding or contracting reserves at dollar shares different from the global average. 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, while Turkey, Peru, and Spain contributed smaller downward pressure of around negative 0.2 percentage point each. Switzerland emerged as the largest negative mechanical contributor through the reserve change channel during this period because its dollar share sat below the global average at the start, so its large-scale reserve accumulation mechanically dragged down the cross-country aggregate dollar share even as Switzerland simultaneously increased its own dollar allocation. From 2019 to 2023, the dollar share decline moderated to 2 percentage points, with the report analyzing sixty-two countries with complete data while consolidating China, Russia, Mexico, and Morocco into a single group due to missing 2023 disclosure data.
The researchers found that for the sixty-two countries with complete 2019-2023 data, the preferences channel was actually slightly positive at 0.3 percentage point, meaning these countries collectively increased their dollar allocations over the period. The reserve change channel contributed a modest negative of 0.5 percentage point for this group. Under assumptions matching the observed aggregate decline, the implied contribution from China, Russia, Mexico, and Morocco to the preferences channel is large and negative at 2.0 percentage points, suggesting "the aggregate dollar share decline over 2019 to 2023 is almost entirely attributable to the preferences of these four countries," the report states. Among countries with complete data, contributions to both channels cluster around zero, with Denmark emerging as the largest negative contributor to the reserve change channel through reserve expansion from a below-average dollar share, followed by Bulgaria, Romania, and Poland.
The concentration of dollar-share decline among a few large reserve holders matters because it contradicts the narrative of broad-based international diversification away from American assets. Official reserve holdings traditionally respond to country needs for dollar liquidity, currency management requirements, and insurance against funding shocks—drivers that the report says still retain their strength. The authors explain that the same country can contribute through opposing channels simultaneously, as China and Switzerland both did during 2015-2019, making aggregate statistics misleading without understanding the underlying composition. For policymakers and market participants, the analysis indicates there's little evidence of widespread official diversification away from dollars despite the decline in aggregate dollar share. The rotating group of countries contributing to the reserve change channel reflects idiosyncratic reserve management needs rather than systematic dollar avoidance, and understanding this concentration is essential for accurately interpreting the dollar's continued importance in international financial markets.