Description
With the U.S. dollar increasingly weaponised as an instrument of statecraft what began as a defensive reaction by third countries to the unprecedented freezing of Russia’s reserves in 2022 has evolved into a wider recalibration of how monetary power operates in an era of contested multipolarity. Under the second Trump administration’s assertive geoeconomic turn, the fusion of fiscal, financial, and foreign policy made explicit what Susan Strange theorised decades ago: that the structure of global finance constitutes a core pillar of power. Yet this pillar, the financial structure in Strange’s fourfold framework, remains under-examined in contemporary debates on multipolarity. This article explores how central banks are reassessing their reserve allocation strategies: not merely out of pecuniary concern, but as a form of geopolitical risk management. Through substantial, and unique, empirical work, it argues that as the dollar’s dominance has become hyper-politicised, central banks are no longer merely managing reserve portfolios; they are navigating hierarchy, loyalty, coercion, and uncertainty within a reordered financial world.
