Have the erratic policies pursued by Mr. Trump over the past year affected dollar holdings? The answer depends.

For conventional measures as reported by IMF’s COFER, the dollar share has declined both as a share of foreign exchange reserves, and of the sum of foreign exchange and gold reserves.

Figure 1: US dollar share of foreign exchange reserves (bold black), share of foreign exchange reserves controlling for fx valuation effects at 2024Q4 rates (teal), share of foreign exchange and gold reserves (brown). Source: NY Fed via FRED, IMF COFER, Gold Council, and author’s calculations.

Figure 1 highlights the fact that the decline in dollar share is driven by dollar depreciation, and gold appreciation. Controlling for exchange rates (but not other valuation effects, e.g., price), dollar share rose from 2024Q4. However, dollar holdings have decreased in the last two quarters, after “Liberation Day”, and threats to Denmark over Greenland.

Unfortunately, we won’t have data on Q1 until end-June 2026, so the implications of the war will not be clear for some time.