DBT Bureau
Pune, 14 April 2026
The global monetary landscape is undergoing a structural transformation, with the US Dollar Index losing relative dominance in global reserves. The US Dollar now accounts for approximately 46% of global FX and gold reserves, marking its lowest level in at least 26 years and reflecting a sharp 15-percentage-point decline since 2017.
Even when excluding gold, the dollar’s share stands at 57% of global reserves, the weakest level since 1994, according to IMF data. This trend clearly indicates that central banks are actively diversifying reserve holdings, reducing overdependence on a single currency.
Historically, such declines in dollar dominance have coincided with periods of macro stress and economic uncertainty. The last time the dollar’s share fell below 50% (1990–91), the global economy faced high inflation, recessionary pressures, and a loss of confidence in US economic stability.
Key Drivers Behind the Shift
· Rising geopolitical fragmentation and sanctions-led diversification
· Increasing allocation toward gold and alternative currencies
· Strategic reserve rebalancing by emerging economies
View:
“The dollar is not collapsing—but its monopoly over global reserves is clearly weakening.”
Conclusion:
The world is gradually moving toward a multi-polar reserve system, where diversification replaces concentration.
“This transition is structurally bullish for gold and real assets, as reserve managers seek stability beyond fiat concentration.”
Source: Kedia Advisory
