OMFIF Survey: Global Central Banks Plan to Cut Dollar Reserves for First Time in Three Years, Favoring Euro and Renminbi
Taylor Wilson
A survey of 90 central banks and sovereign funds managing over $10 trillion shows reserve managers plan to trim dollar exposure over the long term — the first such shift in three years. This means → the dollar's status as the default reserve asset is being actively reconsidered.
Is the dollar being abandoned? How big is the cut?
Respondents expect the dollar to make up 52% of the average reserve portfolio in ten years, down from about 57% today. This means → not abandonment, but a slow, directionally clear drawdown.
In plain terms = the dollar is still the single largest holding, but managers are collectively saying for the first time: we plan to put fewer eggs in this basket.
The OMFIF research team wrote: "The search for diversification has become a defining feature of reserve management."
Where does the money go? What makes the euro and renminbi attractive?
Advanced-economy central banks lean toward the euro; emerging markets focus on the renminbi — two diverging paths shaped by different trade ties and political calculations.
55% of respondents said a "permanent, large-scale" EU debt issuance would boost their willingness to hold euro assets. In plain terms = the euro's biggest weakness is not economic size — it is the lack of a bond pool as deep and liquid as U.S. Treasuries.
On the renminbi, nearly all respondents view it as an effective diversification tool, but concerns about China's market structure persist. This means → the renminbi is valued for its hedging benefit, not as a dollar replacement.
How is geopolitics reshaping reserve managers' playbooks?
Global policy rates remain the top driver of short-term investment decisions, but geopolitical risk increasingly dominates long-term strategy.
About 79% of central banks and 60% of public funds believe the global monetary system is evolving toward a "multipolar" structure. This means → most managers are already planning for a world where the dollar is no longer dominant.
OMFIF senior economist Yara Aziz wrote: "The old assumption that public investors can wait for conditions to return to normal looks increasingly unrealistic."
Why has gold become central banks' new favorite?
82% of surveyed central banks now hold gold; the report describes it as having "moved to the core of reserve management strategy."
Over the next one to two years, a net 30% of respondents plan to increase gold allocations — the strongest short-term buying intent of any asset class. This reflects a repricing of gold's "ultimate safe haven" role amid geopolitical risk and loosening confidence in the dollar.
Interest in non-mainstream reserve currencies — the Norwegian krone, New Zealand dollar, and British pound — is also rising, reinforcing the diversification trend.
How do public funds differ from central banks?
Among public funds, demand for real assets such as infrastructure and real estate leads all categories: nearly 60% plan to increase allocations in the next one to two years.
Emerging-market appetite is climbing: 38% of public funds plan to add EM exposure, up from 27% last year; those planning to add developed-market exposure fell from 47% to 25%. This means → capital flows are tilting from developed to emerging markets — public funds are voting for "multipolarity" with real money.
In plain terms = central banks adjust the currency basket; public funds adjust the asset basket — same direction, different instruments.
How far along are central banks in adopting AI?
Over 89% of advanced-economy central banks already use artificial intelligence, compared with just 44% in emerging markets.
More than 66% of all central banks plan to increase AI integration in the near term. This reflects a digital divide at the operational level: advanced economies are well ahead, while emerging markets are still catching up.
In plain terms = the tools for managing reserves are upgrading, but not at the same speed — and the gap may widen efficiency differences across economies.
Content is for reference only, not financial advice.