IMF Insights: Dollar’s Share of Reserves Held Steady in Second Quarter When Adjusted for FX Moves

By: Peter Ort, The Quinnipiac University Global Economics Research Team

Photo by: Nedret Binici on Unsplash

Over the course of 2025, tariffs have complicating exchange rates of the USD compared to its freer trading counterparts, as they have been fluctuating considerably against the Euro and other mostly European currencies. A recent IMF blog post titled Dollar’s Share of Reserves Held Steady in Second Quarter When Adjusted for FX Moves shows history so far of USD to major foreign currency exchange rates in 2025.

In the first half of this year, the USD fell by 10% to the currencies of Japan, Canada, Switzerland, Sweden, and the United Kingdom. In the second quarter alone, it fell 7.9% to the euro, which could theoretically tank reserves for it. Below is a graph representing this fall.

Credit: IMF

But despite this, holding exchange rates constant shows the USD holding fairly well against exchange rate shortcomings. Without holding exchange rates constant, the share of allocated reserves for the USD falls from 57.79% to 56.32% in just one quarter as opposed to holding rates constant, where it only falls to 57.67%.

We see this same pattern with the euro as well, as the share of claims for the euro compared to international currencies soared from 20% in the first quarter to 21.13% in the second. Again however, 1.17% of the change is due to the steep change in exchange rates with the USD, making the euros share of claims actually fall to 19.96% from the first quarter.

Although the swift change in exchange rate for the USD to all other currencies may seem a bit jarring, it has certainly distracted many from the other factors that affect currency shares in reserves.

For further information, you can read “Dollar’s Share of Reserves Held Steady in Second Quarter When Adjusted for FX Moves”