ECB reduces dollar holdings and shifts funds to yen
The European Central Bank reduced its dollar reserve weight to 78 percent last year while shifting funds to yen. It reported a 1.3 billion euro loss for 2025.
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The European Central Bank (ECB) has revealed a strategic adjustment to its foreign exchange reserves, reducing its exposure to the United States dollar in favor of assets from Japan. This move, described by the institution as a standard rebalancing to align with target allocations, took place during the first quarter of last year. The ECB generated a gain of 909 million euros from the transaction and fully reinvested the proceeds into yen-denominated assets. While the shift occurred amid a period of broader economic policy shifts, the bank played down the significance of the timing.
During the first quarter of 2025 the ECB sold a small portion of its U.S. dollar holdings and fully reinvested the proceeds in Japanese yen.
