Dollar’s Grip on Global Reserves Slips Further as Euro, Yen Gain Ground — IMF Data
By Naija247news
Global Economy | Currency Markets
The dominance of the United States dollar in global foreign exchange reserves edged lower again in the third quarter of 2025, while the euro and Japanese yen recorded modest gains, according to newly released data from the International Monetary Fund (IMF).
IMF figures show that the dollar’s share of officially reported global currency reserves declined to 56.92% in the three months to the end of September, down from 57.08% in the second quarter of the year.
By contrast, euro-denominated reserves rose slightly to 20.33%, up from 20.24% in the previous quarter, while the Japanese yen’s share increased to 5.82%, compared with 5.65% earlier.
The data, published on Friday as part of the IMF’s Currency Composition of Official Foreign Exchange Reserves (COFER) report, suggests a period of relative stabilisation after sharp swings in the second quarter of 2025, when foreign exchange markets were unsettled by tariff announcements from U.S. President Donald Trump.
Analysts say reserve managers adjusted positions in response to currency volatility rather than executing wholesale shifts away from the dollar.
“For both dollar and euro reserves, our FX valuation adjustment suggests that reserve managers leaned into currency market fluctuations,” analysts at Goldman Sachs said in a note on the data.
“The third quarter saw a stabilisation in reported reserves, with only minimal shifts in the share of U.S. dollar and euro holdings following the large swings seen in Q2.”
De-dollarisation Debate Intensifies
The renewed decline in the dollar’s reserve share has once again fuelled debate over the long-term future of the greenback as the world’s dominant reserve currency and anchor of the global monetary system.
While some analysts point to early signs of de-dollarisation, particularly among emerging economies seeking to diversify their reserve portfolios, there remains broad consensus that any meaningful erosion of the dollar’s dominance would occur gradually rather than abruptly.
Despite recent declines, the U.S. dollar continues to account for well over half of global reserves, far ahead of the euro and other major currencies.
IMF Methodology Update
The IMF also noted that the latest data reflects a change in reporting methodology, with the Fund now imputing the previously “unallocated” portion of global reserves. In earlier reports, this category captured gaps arising from non-reporting or incomplete submissions by some central banks.
The revised approach, which has been backdated to the year 2000, resulted in small historical adjustments but does not alter the broader trend of gradual diversification within global reserve holdings.
Global Implications
The shifting composition of reserves comes amid heightened geopolitical tensions, trade disputes, and renewed scrutiny of the global financial order. While the dollar remains firmly entrenched at the centre of international finance, incremental gains by the euro and yen highlight how central banks are cautiously managing risk in an increasingly fragmented global economy.
Babatunde Akinsola ✔
Godwin Okafor is the Publisher & CEO of Naija247news Media Group LLC, an independent investigative news platform delivering accurate, data-driven reporting on Nigerian and global politics, economy, finance, and business. Founded in October 2010, Naija247news specializes in developmental journalism, providing timely insights and analysis to readers across Nigeria and the diaspora.
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