De-dollarization is a "myth"? New York Fed: Most central banks are not selling off the dollar

BlockBeats News, September 7 - The New York Fed's latest research indicates that although the dollar's share of global official foreign exchange reserves has declined from 64% to 56% over the past decade, this shift does not suggest that global central banks are systematically reducing their dollar holdings. Researchers stated that there is little evidence of widespread diversification away from the dollar at the official level.

The study shows that across two distinct phases since 2015, the number of countries increasing and decreasing dollar holdings has been roughly balanced. The decline in the dollar's reserve share has been driven primarily by concentrated portfolio adjustments among a few large reserve managers, rather than broad-based asset reallocation globally. Between 2015 and 2019, the changes were mainly driven by the central banks of two countries; from 2019 to 2023, Mexico and Morocco also emerged as significant contributing factors.

The New York Fed noted that most economies' foreign exchange reserve adjustments continue to serve conventional purposes such as dollar liquidity needs, exchange rate management, and responding to funding chain shocks, rather than actively avoiding the dollar.

Additionally, IMF data shows that the dollar's reserve share fell to its lowest level since 1995 in January this year, largely reflecting the passive depreciation of reserve assets due to a weaker dollar exchange rate, rather than large-scale dollar selling by central banks.