Dollar's share in global reserves drops as euro gains ground - IMF
Photo: The euro is competing with the dollar as the world's reserve currency (Getty Images)
The share of the US dollar in global foreign exchange reserves reported by countries to the International Monetary Fund (IMF) slightly declined by 0.1 percentage point to 57.7% in the first quarter of 2025, while euro reserves increased, Reuters reports.
According to the IMF's Currency Composition of Official Foreign Exchange Reserves (COFER) report, the euro's share rose from 19.8% to 20.1% - its highest level since the end of 2022.
The most dramatic increase showed the Swiss franc, whose share in reserves quadrupled to 0.8% by the end of March - the highest level since 1999 when the euro was introduced. The share of the pound sterling also grew.
Since the beginning of the year, currency markets have experienced some dramatic swings. The dollar lost nearly 4% in the first quarter amid major political shifts under US President Donald Trump's administration - especially in trade, security, and economic policy, which undermined confidence in the world's leading reserve currency.
Dollar's decline
The dollar’s decline sharply accelerated in the second quarter, when it fell by more than 7% after Trump imposed sweeping tariffs on "Liberation Day" in early April, although some of those measures were later temporarily suspended.
Meanwhile, the Swiss franc, widely seen as a safe-haven currency, became one of the strongest currencies of the year, strengthening 14% against the dollar.
Although currency swings don't always reflect reserve managers' willingness to hold those currencies, recent developments have fueled debate over whether the US dollar is at risk of losing its status as the world's primary reserve currency and the cornerstone of the global monetary system.
While some analysts point to early signs of de-dollarization, there is a broad consensus that any such shifts will occur very slowly.
Role of euro
Earlier, ECB (European Central Bank) Vice President Luis de Guindos stated the financial architecture of the eurozone is still far from that of the US, so the euro cannot realistically replace the dollar as the world's reserve currency in the near term.
Deputy Governor of the National Bank of Ukraine (NBU) Sergiy Nikolaychuk also noted that there is currently no viable alternative to the dollar as the global reserve currency. The NBU holds so far over 80% of Ukraine's reserves in US dollars.
