The International Role of the U.S. Dollar – 2025 Edition

What it says

Fed Board staff update their survey of how the dollar is used around the world: as a reserve asset, as an anchor for other currencies and as a medium of exchange in trade, payments, banking, debt issuance and foreign exchange. They combine these into an index that has barely moved in five years and sits far above the US share of world output and trade. The note sets a baseline before 2025's tariff changes and credit rating downgrade could show up in the data. It finds little sign that sanctions on Russia drove reserve managers away from the dollar, and shows that gold's rising share of reserves mainly reflects price rather than quantity. Swap lines and the FIMA repo facility reinforce the dollar by guaranteeing crisis funding. Longer-run challengers include deeper European integration, China's growth and digital currencies, though stablecoins so far entrench the dollar.

What to take from it

1. 1

   The dollar made up 58 percent of disclosed official reserves in 2024, against 20 percent for the euro and 2 percent for the renminbi; its 2001 peak was 72 percent.

2. 2

   Gold's share of official reserves more than doubled since 2015 to over 23 percent, but physical holdings rose by under 10 percent.

3. 3

   Foreign investors held $9 trillion, or 32 percent, of marketable Treasuries in early 2025, down from almost 50 percent in 2014.

4. 4

   The dollar was on one side of about 88 percent of global FX transactions in April 2022, a share stable for 20 years.

5. 5

   Fed swap lines peaked at $585 billion in the financial crisis and $450 billion in 2020.

Put it to work on L3VLUP

• Carry trade
• Treasury yield
• Macro chartbook