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financeThursday, July 9, 2026 at 12:01 PM
US Treasury Market Liquidity Premium Narrows as Foreign Official Holdings of Dollar Assets Decline 4.2 Percent Year-over-Year

US Treasury Market Liquidity Premium Narrows as Foreign Official Holdings of Dollar Assets Decline 4.2 Percent Year-over-Year

Central-bank data reveal a measurable slowdown in official dollar-asset accumulation tied to sanctions risk and Treasury-market dynamics. The shift is incremental and driven by portfolio mechanics rather than coordinated policy statements. Primary records show counterparties gaining sanctions insulation while the US retains deficit-financing advantages at reduced scale.

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Absent reversal in sanctions exposure or a sustained compression of US term premia, reserve managers are expected to maintain reduced dollar accumulation rates through 2025, with the dollar share of reserves likely to test 57 percent by year-end.

⚡ Prediction

BIS: Dollar share of allocated reserves falls below 57.5 percent in the Q4 2025 COFER release

Sources (3)

  • [1]
    Treasury International Capital Data(https://home.treasury.gov/data/treasury-international-capital-tic-data)
  • [2]
    BIS Quarterly Review June 2024(https://www.bis.org/publ/qtrpdf/r_qt2406.htm)
  • [3]
    IMF Currency Composition of Official Foreign Exchange Reserves(https://data.imf.org/?sk=E6A5F467-C14B-4AA8-9F6D-5A09EC4E62A4)