diff --git a/CHANGES.md b/CHANGES.md
index 59cba455c..b72bd76e5 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -23,6 +23,7 @@
 - Fix rect filter bounds math (by @ryanbreen) [Github #3180](https://github.com/penpot/penpot/pull/3180)
 - Removed sizing variables from radius (by @ondrejkonec) [Github #3184](https://github.com/penpot/penpot/pull/3184)
 - Dashboard search, set focus after shortcut (by @akshay-gupta7) [Github #3196](https://github.com/penpot/penpot/pull/3196)
+- Library name dropdown arrow is overlapped by library name (by @ondrejkonec) [Taiga #5200](https://tree.taiga.io/project/penpot/issue/5200)
 
 ## 1.18.3 (Unreleased)
 
diff --git a/frontend/resources/styles/main/partials/sidebar-assets.scss b/frontend/resources/styles/main/partials/sidebar-assets.scss
index b404d58a9..1d6d3b750 100644
--- a/frontend/resources/styles/main/partials/sidebar-assets.scss
+++ b/frontend/resources/styles/main/partials/sidebar-assets.scss
@@ -112,6 +112,7 @@
 
   .collapse-library {
     margin-right: $size-2;
+    flex-shrink: inherit; // Inheriting shrink behaviour
 
     &.open svg {
       transform: rotate(90deg);