Based on the International Monetary Fund’s Currency Composition of Official Foreign
Exchange Reserves (COFER) data published July 9, 2025, the US dollar continues to
dominate global foreign exchange reserves with 57.74% of allocated reserves, though this represents a slight decline from previous quarters. Total global foreign exchange reserves reached $12.537 trillion in Q1 2025, with the Euro maintaining its position as the second most held reserve currency at 20.06%.
Key Findings
Reserve Currency Composition (Q1 2025) The US dollar remains the world’s primary
reserve currency, holding 57.74% of all allocated foreign exchange reserves totaling $7.72 trillion. The Euro follows as the second most significant reserve currency at 20.06% ($2.33 trillion), demonstrating the continued bipolar nature of the global monetary system.
Other major reserve currencies include the Pound Sterling at 5.19% ($603.70 billion),
Japanese Yen at 5.15% ($599.10 billion), and a category of “Other currencies” at 4.93%
($573.42 billion). The Canadian Dollar accounts for 2.63% ($306.13 billion), while the
Chinese Yuan Renminbi represents 2.12% ($246.31 billion) of allocated reserves.
Quarterly Trends and Patterns Examining the five-quarter period from Q1 2024 to Q1
2025 reveals several notable trends. Total foreign exchange reserves have grown from
$12.385 trillion to $12.537 trillion, representing an increase of approximately $152 billion or 1.2% over the year.
Official Foreign Exchange Reserves by Currency (Q1 2024 – Q1 2025), Source: IMF COFER
The US dollar’s dominance has remained relatively stable, though it experienced some
fluctuation throughout 2024. Dollar reserves peaked in Q3 2024 at $6.784 billion before
declining to $6.629 billion in Q4 2024 and recovering to $6.720 billion in Q1 2025.
Euro reserves have shown resilience, growing from $2.252 trillion in Q1 2024 to $2.334
trillion in Q1 2025, despite some volatility in the middle quarters of 2024. This represents a 3.6% increase over the year.
Notable Currency Movements The Chinese Yuan Renminbi has demonstrated interesting
dynamics, starting at $246.99 billion in Q1 2024, experiencing fluctuations throughout the year, and ending at $246.31 billion in Q1 2025. Despite geopolitical tensions and economic uncertainties, the Yuan has maintained its position as a significant reserve currency.
The Japanese Yen has shown considerable variation, declining from $654.67 billion in Q1
2024 to $599.10 billion in Q1 2025, representing an 8.5% decrease. This decline may reflect Japan’s economic challenges and monetary policy decisions during this period.
The British Pound has demonstrated strength, increasing from $562.25 billion to $603.70
billion over the year, representing a 7.4% gain that reinforces the UK’s continued importance in global finance despite Brexit-related uncertainties.
Unallocated Reserves Unallocated foreign exchange reserves have remained relatively
stable, hovering around $890-900 billion throughout the period. These reserves ended Q1
2025 at $897.28 billion, representing approximately 7.2% of total reserves.
Implications
The data reveals several important implications for the global financial system. The US
dollar’s continued dominance, while showing some quarterly volatility, demonstrates the
persistent strength of the American economy and financial system. However, the presence of significant Euro reserves indicates that central banks continue to diversify their holdings to reduce concentration risk.
The growth in Pound Sterling reserves suggests renewed confidence in the UK economy,
while the relative stability of the Chinese Yuan indicates that despite geopolitical tensions, central banks view Chinese assets as a viable component of their reserve portfolios.
The substantial amount of unallocated reserves ($897.28 billion) suggests that central banks are maintaining flexibility in their reserve management strategies, possibly holding assets in currencies not specifically tracked by the COFER database or maintaining liquidity for tactical allocation decisions.
Conclusion
The Q1 2025 COFER data demonstrates the continued evolution of the global reserve
currency landscape. While the US dollar maintains its dominant position, the presence of
significant holdings in other major currencies reflects central banks’ ongoing efforts to
diversify their reserves. The growth in total reserves to $12.537 trillion indicates continued global economic expansion and the important role that foreign exchange reserves play in maintaining financial stability and supporting international trade.
The relatively stable composition of reserve currencies suggests that despite ongoing
geopolitical tensions and economic uncertainties, central banks are maintaining their strategic approach to reserve management, balancing the need for liquidity, safety, and return while supporting their domestic monetary policy objectives.
Source: https://data.imf.org/en/Dashboards/COFER%20Dashboard
For historical context, refer to the detailed study of reserve currency trends from 1995 to 2024 available at:
LEAP Insights – Reserve Currency Evolution (1995–2024)
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