IMF Q2 2025 Data Shows Stable Dollar Reserves, Challenging Dedollarization Claims

The International Monetary Fund’s Currency Composition of Official Foreign Exchange Reserves (COFER) data for the second quarter of 2025 reveals that the US dollar’s share of global reserves remains steady at approximately 59.4%, consistent with prior quarters. This stability calls into question widespread narratives suggesting a rapid dedollarization trend among central banks, a topic of growing interest for both traditional and digital asset markets.

What happened

The IMF released its Q2 2025 COFER data, which tracks the currency composition of official foreign exchange reserves held by central banks and monetary authorities worldwide. The data shows the US dollar’s share at roughly 59.4%, a figure unchanged from recent quarters, indicating no significant shift away from the dollar as a reserve currency.

The COFER dataset distinctly separates changes in reserve values caused by exchange rate fluctuations from those resulting from actual portfolio reallocations by central banks. According to the IMF’s methodology and the Q2 2025 report, much of the observed variation in reserve values is attributable to currency valuation effects rather than genuine changes in reserve currency allocations.

Independent analysis from the Peterson Institute for International Economics (PIIE) corroborates this interpretation, concluding that despite persistent rhetoric around dedollarization, there is no substantive evidence of portfolio reallocation away from the US dollar in recent quarters. Similarly, the Bank for International Settlements (BIS) Quarterly Review for Q2 2025 notes stable demand for US dollar assets among official reserve managers, emphasizing that exchange rate effects often explain apparent volatility in reserve shares.

These findings collectively challenge narratives that central banks are aggressively diversifying away from the US dollar, highlighting the importance of distinguishing between valuation-driven changes and actual portfolio shifts.

Why this matters

The distinction between exchange-rate-driven valuation changes and portfolio reallocations is critical for interpreting global reserve currency dynamics accurately. Headlines focusing solely on fluctuations in reserve values without adjusting for exchange rate effects risk overstating or misrepresenting dedollarization trends.

For traditional financial markets, this means that signals derived from reserve data need to be analyzed with caution. Misinterpretation could lead to inaccurate assumptions about central bank behavior, potentially influencing currency markets, sovereign debt issuance, and policy decisions based on perceived shifts in reserve preferences.

In digital asset markets, where macroeconomic signals increasingly inform sentiment and trading strategies, conflating valuation changes with portfolio reallocations undermines the credibility of reserve data as an indicator of institutional shifts toward diversification or alternative assets like cryptocurrencies. The persistence of the US dollar’s dominant share in official reserves suggests that, at least for now, the macroeconomic case for dedollarization as a bullish catalyst for digital assets remains unsubstantiated by official reserve data.

More broadly, these findings underscore the resilience of the US dollar’s role in the international monetary system and highlight the complexities involved in interpreting aggregated reserve data that mask underlying drivers.

What remains unclear

Despite the clarity on stable dollar shares, several important questions remain unanswered. The COFER data aggregates reserve holdings and does not provide granular, country-level details on portfolio reallocations, limiting insight into which central banks might be diversifying and to what extent.

There is also limited transparency on how central banks internally report and classify portfolio reallocations versus valuation changes, reducing the ability to verify the timing and intent behind reserve adjustments.

Additionally, the COFER data does not explicitly include digital asset holdings by central banks, leaving open the question of whether and how emerging reserve management strategies incorporate cryptocurrencies or other non-traditional assets.

Potential lag effects or reporting delays in COFER submissions might mask recent shifts in reserve currency allocations, especially in a rapidly changing geopolitical environment. Finally, the influence of geopolitical considerations on reserve decisions is difficult to quantify from quarterly aggregate data alone.

What to watch next

Future COFER releases for Q3 and Q4 2025 to confirm whether the stable dollar share trend continues or if emerging shifts become visible.
Disclosures or research from central banks on their reserve management strategies, particularly regarding transparency around portfolio reallocations and inclusion of digital assets.
Analysis from independent institutions like PIIE and BIS to monitor evolving interpretations of reserve data and adjustments in methodology separating valuation effects from reallocations.
Geopolitical developments that may influence reserve currency preferences, including sanctions, trade tensions, or shifts in alliances affecting reserve diversification decisions.
Regulatory or policy updates concerning central bank digital currencies (CBDCs) and their potential impact on reserve compositions and international currency usage.

While the IMF’s Q2 2025 COFER data confirms the US dollar’s continued dominance in global reserves, significant gaps in granularity and transparency leave open questions about the nuances of central bank reserve management. This tension highlights the need for cautious interpretation of reserve data as a macroeconomic signal and suggests that claims of rapid dedollarization should be viewed with measured skepticism until more detailed evidence emerges.

Source: https://beincrypto.com/imf-q2-2025-usd-reserve-share/. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.