Federal Reserve Bank of New York study on dollar reserve decline

A study by the Federal Reserve Bank of New York indicates that the decline in the U.S. dollar’s share of global foreign exchange reserves is not a broad-based global trend, but is instead driven by a small number of large reserve managers. According to IMF data, the dollar’s share fell from 64% in 2015 to 56% in 2025.

Researchers identified China, Russia, Mexico, and Morocco as the primary drivers of this aggregate decline. The study distinguishes between the “reserve change channel,” which involves mechanical adjustments as total reserve pools grow or shrink, and the “active preferences channel,” which tracks intentional decisions by central banks.

Notably, the research found that among 62 countries examined between 2019 and 2023, the active preferences channel actually showed a slight positive contribution of 0.3 percentage points toward dollar holdings, suggesting that many central banks were marginally increasing their dollar exposure through deliberate choices.