The main reason why foreign exchange reserves are in dollars is that the main currency circulating in the world is the dollar.
Under the system, a large amount of dollar foreign exchange reserves have been accumulated.
The dollar is, is the world’s major valuation, settlement and reserve currency, freely convertible around the world.
The dollar’s status was established as early as 1944.
The dollar now accounts for more than 60 per cent of the world’s reserve currencies and nearly 40 per cent of the global payments market.
More than 90% of the global commodity pricing system is denominated in dollars, so the dollar remains the strongest currency in the world, hence foreign exchange reserves are denominated in dollars.