More central banks and public funds are planning to reduce their exposure to the U.S. dollar than to raise it over the coming decade, according to a new survey from the Official Monetary and Financial Institutions Forum (OMFIF). The finding marks the first time the thinktank's poll has recorded a net tilt away from dollar allocations among the public investors it covers.
The London-based survey, which sampled 90 central banks, public pension funds and sovereign wealth funds that together manage roughly $10 trillion, also found an appetite among respondents to broaden the tools they use to manage volatility - including a faster adoption of artificial intelligence.
OMFIF senior economist Yara Aziz underscored the shift in approach in the report, writing: "The old assumption that public investors can wait for the environment to normalise looks increasingly unrealistic."
Dollar dynamics remain complex. The currency has strengthened by about 3% year-to-date, supported by higher U.S. interest rates, demand for U.S. assets and a flight-to-safety reaction tied to the U.S.-Iran war. Yet the survey points to rising political and geopolitical concerns linked to the dollar's dominant role in the global monetary system as a driver of reallocation plans.
Respondents signalled a move toward a more multipolar reserve landscape: 79% of central banks and 60% of public funds said they believed the global monetary system was evolving toward a "multipolar" configuration. In practice, that perception was reflected in increased allocations to a range of currencies outside the traditional top group.
Central banks reported raising exposures to the Norwegian krone and the New Zealand dollar, and expressed heightened interest in sterling. While many respondents said they plan to grow holdings of the euro and the Chinese renminbi, they also flagged structural obstacles that limit those currencies' wider adoption. Despite such caveats, nearly all surveyed regarded the renminbi as an effective portfolio diversifier.
Gold emerged as a central element of reserve management strategy. The metal is held by 82% of the central banks in the survey and has reached a series of record highs. In the near term, gold is the asset with the strongest intention to see increased holdings: a net 30% of respondents said they planned to boost allocations to gold over the next one to two years.
Another prominent theme of the survey was the push to expand artificial intelligence use in public investor operations. More than 66% of central banks indicated plans to increase AI integration in the near term. Notably, no advanced-economy central bank reported being satisfied with its current AI deployment, and only 9% of central banks overall said they were content with present usage levels.
Where AI is applied today, the primary use cases are data analysis and back-office functions. There is a marked divide between developed and emerging market institutions: more than 89% of central banks in developed economies are using AI, compared with 44% in emerging market central banks.
Public funds in the survey displayed a clear preference for physical assets. Nearly 60% of public pension and sovereign funds plan to raise allocations to infrastructure and real estate over the next one to two years. At the same time, public funds are re-evaluating geographic exposure.
Allocation intentions shifted toward emerging markets: 38% of global public funds plan to increase weightings to emerging economies, up from 27% the prior year. Interest in boosting allocations to developed markets declined to 25% from 47% year-on-year. The United States and China were cited as the most attractive markets, in part because of their roles in driving AI-related activity and investment.
The OMFIF survey therefore paints a picture of public investors adjusting portfolio structures in response to perceived geopolitical and policy risks, while also accelerating strategic changes in asset mix and technology use. The move away from a dollar-centric stance, greater emphasis on gold, and stepped-up AI adoption are the clearest signals emerging from the responses of these institutions that collectively steward large pools of public capital.