Dollar's Share of Reserves Decline Seen As Overstated

The shift in global reserves away from the US dollar has been overstated, according to research from the Federal Reserve Bank of New York. The study found that while the dollar's share of foreign-exchange reserves declined from 64% a decade ago to 56% last year, this change is not indicative of widespread de-dollarization.

The researchers discovered that roughly equal numbers of countries had increased and decreased their dollar holdings during two separate periods since 2015. This suggests that the decline in the dollar's share is largely due to moves by a small number of reserve managers rather than a broad trend away from the currency.