The United States' Excessive Advantage

US Dollar Maintains Reserve Currency Strength Despite 2025 Policy Shocks

Recently, I noted that the US Dollar’s role as the world’s primary reserve currency remained intact throughout the policy upheavals of 2025. According to IMF statistics, international reserve managers continued to hold onto their US assets, even during the turbulent period in the second quarter when reciprocal tariffs were hastily introduced and the Dollar experienced significant declines.

What stands out from this period is how deeply rooted the Dollar’s reserve status truly is—far more resilient than many had assumed. While it’s notable that the US managed to avoid undermining its reserve currency position, it’s even more remarkable that the so-called “exorbitant privilege”—America’s unique financial advantage—persisted through such instability.