Reserve Managers Increase Exposure to the Euro, Yuan, Gold and Emerging Markets as Geopolitical Risks Accelerate the Shift Towards a More Multipolar Financial System
The world’s central banks are entering a new era of reserve management, one defined less by the search for yield than by the need to navigate geopolitical fragmentation, technological disruption and a more uncertain international monetary system, according to the latest Global Public Investor 2026 survey published by the Official Monetary and Financial Institutions Forum (OMFIF).
The survey marks a significant turning point. For the first time since OMFIF began conducting the study, more central banks expect to reduce rather than increase their allocations to the US dollar over the coming decade. The shift does not signal the end of the dollar’s dominance but reflects a broader strategy of diversification as reserve managers adapt to a more multipolar global economy.
Based on responses from 90 central banks, sovereign wealth funds and public pension funds managing more than $10 trillion in assets, the survey found that geopolitical considerations are becoming as influential as monetary policy in shaping long-term investment decisions. While global interest rates remain the principal driver of short-term portfolio allocation, respondents increasingly regard geopolitical risk as a structural factor requiring permanent adjustments to reserve management strategies.
Despite expectations of lower allocations over time, the US dollar remains firmly established as the world’s dominant reserve currency, supported by the depth, liquidity and safety of US financial markets. OMFIF projects that dollar-denominated assets will still represent around 52% of global reserve portfolios a decade from now, compared with 23% for the euro and 5% for China’s renminbi, underscoring that reserve diversification is expected to be evolutionary rather than disruptive.
The survey nevertheless points to an increasingly multipolar monetary landscape. Nearly 79% of reserve managers believe the international monetary system is moving towards a more diversified structure. Advanced economies continue to favour the euro as their preferred alternative reserve asset, while many emerging-market institutions increasingly view the renminbi as an important diversification tool despite continuing concerns over China’s capital controls and financial market transparency.
Europe’s ability to strengthen the euro’s international role also emerged as a key theme. More than 55% of respondents said that permanent, large-scale issuance of common European Union debt would increase the attractiveness of euro-denominated reserve assets by expanding the supply of highly liquid, high-quality securities.
Beyond currencies, gold has become one of the most strategically important reserve assets. Held by 82% of central banks, bullion is increasingly viewed as a hedge against geopolitical uncertainty, sanctions risk and financial market volatility. A net 30% of respondents expect to increase gold holdings over the next one to two years, making it the most favoured reserve asset for near-term portfolio diversification.
The survey’s findings reflect a broader reassessment of reserve management following successive geopolitical shocks, including the weaponisation of financial sanctions, heightened trade fragmentation and persistent uncertainty surrounding global supply chains. Together, these developments are encouraging central banks to place greater emphasis on resilience, liquidity and strategic diversification rather than simply maximising investment returns.
Technology is also reshaping central bank operations. More than two-thirds of respondents expect artificial intelligence to play a larger role in reserve management, economic analysis and institutional operations over the coming years. Adoption, however, remains uneven, with almost 90% of central banks in advanced economies already deploying AI compared with approximately 44% in emerging markets, highlighting a widening technological divide across the global financial system.
The survey also signals a renewed shift towards emerging markets. Sovereign wealth funds and public pension funds are increasing allocations to infrastructure, real estate and productive assets, while 38% of public investors expect to expand investments in emerging economies—significantly more than those planning to increase exposure to developed markets. The United States and China nevertheless remain the world’s most attractive investment destinations, reflecting their leadership in artificial intelligence, technology and innovation.
OMFIF concludes that reserve management is undergoing a structural transformation rather than a cyclical adjustment. The assumption that global public investors can simply wait for markets to return to normal has given way to the recognition that geopolitical competition, technological change and economic fragmentation are becoming permanent features of the international financial system. For central banks and sovereign investors alike, the challenge is no longer merely preserving wealth, but constructing resilient portfolios capable of navigating an increasingly multipolar world.
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