The share of global US dollar reserves drops to 58% in 2024: a 14% decline over 22 years.
According to data from the Atlantic Council, the share of the US dollar in global reserves has dropped to 58% in 2024, compared to 72% in 2002, a 14% decline over 22 years. Since the end of World War II, the dollar has been the world’s primary reserve currency. The euro is second in this ranking with a share of about 20%.
In recent years, geopolitical tensions, such as the Russian invasion of Ukraine, have been driving various countries to diversify their reserves and reduce reliance on the dollar.
The BRICS nations, composed of Brazil, Russia, India, China, and South Africa, are at the forefront of promoting a shift away from the dollar. Over the past two years, the BRICS have intensified efforts to use their national currencies in international trade. China is at the center with its Cross-Border Interbank Payment System (CIPS), which aims to create an alternative financial infrastructure independent of the dollar or the SWIFT system. The Asian country is pushing for the use of the yuan in international transactions, although its share in global reserves has slightly decreased from 2.8% in 2022 to 2.3% in 2023 due to concerns about the Chinese economy and rising tensions with the United States and G7 countries.
Despite the recent decline, the US dollar continues to dominate global reserves, trade, and international transactions, without any true rival currencies.
The role of gold
Gold is making a comeback among global reserves, with nearly one-third of central banks planning to increase their gold reserves in 2024. The 2022 sanctions against Russia have prompted some countries to diversify their reserves with gold.
