The dollar's dominance as a reserve currency eroded last year at 10 times the pace seen in the past 2 decades

• The US dollar's reserve currency status has seen gradual erosion for two decades, Eurizon strategists said.
• But last year, the pace of erosion was 10 times faster amid currency sanctions against Russia. 
• The dollar's dominant role in international trade is unlikely to be challenged soon, Eurizon said.

The dollar's standing as a reserve currency of choice saw a steep decline in 2022 even though its strength in international trade remains unchallenged, according to Eurizon SLJ Asset Management.

In a Monday note, strategists Joana Freire and Stephen Jen calculated that the greenback accounted for about two-thirds of total global reserves in 2003, then 55% by 2021, and 47% last year.

"This 8% decline in one year is exceptional, equivalent to 10 times the average annual pace of erosion in the USD's market share in the prior years," the authors said.