Survey: Global Institutions Plan to Reduce USD Exposure for First Time in 3 Years
According to an OMFIF survey of central banks and sovereign wealth funds managing over $10 trillion, 4% plan to reduce USD exposure over 12-24 months, the first such reading in three years. Meanwhile, 82% of central banks now hold physical gold, up from 71% last year.
An OMFIF survey covering 74 central banks and 16 public pension and sovereign wealth funds (managing over $10 trillion in reserve assets) found that 4% of financial institutions plan to reduce their US Dollar exposure over the next 12-24 months. This marks the first net reduction reading in three years. The US Dollar is the only major currency expected to see lower exposure among respondents.
Over a longer horizon, 8% of institutions anticipate reducing their USD reserves over the next 10 years. Despite the shift, the US Dollar remains the most-held currency at 58% of portfolios, slightly down from 60% in 2025.
Central banks are diversifying away from the dollar into gold. The survey shows 82% of central banks now hold physical gold, compared to 71% a year earlier. Furthermore, 51% of respondents cited protection against geopolitical risk as a motivation for holding gold, up from 40% in 2024.
Source: The Kobeissi Letter