The dollar’s position in global currency reserves decreased to 57.7% during the first quarter of 2025 from 57.8% at the end of 2024 according to IMF data released on Wednesday. The euro gained its highest percentage since late 2022 to reach 20.1% as central banks changed their preferences because of dollar market instability.
The dollar has encountered rising doubts from investors because President Donald Trump introduced extensive tariff policies during this year. The dollar value decreased by 4% in Q1 and experienced a 7% decline in Q2 after the government implemented wide import levies during early April. The short-term currency fluctuations do not directly impact reserve holdings yet analysts predict that extended market instability could diminish the dollar’s position as a leading currency.
The total U.S. dollar claims experienced a 1.4% quarterly increase to reach $6.72 trillion despite the percentage decline. The euro experienced a 2.6% increase to reach $2.3 trillion during this period.
The debate about the dollar’s position as the global reserve anchor continues to intensify. Economists predict a possible de-dollarization process but most experts agree this process will take years to complete rather than months. The dollar maintains its position as the leading currency but diversification trends are gaining speed because of increasing geopolitical tensions.
