8th May 2023 (6 Topics)
1
May
2
May
3
May
4
May
5
May
6
May
8
May
9
May
10
May
11
May
12
May
13
May
15
May
16
May
17
May
18
May
19
May
20
May
22
May
23
May
24
May
25
May
26
May
27
May
29
May
30
May
31
May
Will the greenback still be green?
Context:
As China, India, and Russia dabble in trade using partner currencies for payment instead of the U.S. dollar, various media are rife with speculation about the demise of the dollar as world reserve currency.
The rise of the dollar
- Strong and stable economy of USA: The rise of the dollar as the world currency closely aligns with the rise of the U.S. as one of the world’s strongest economies with a deep financial system and a stable government.
- Uninterrupted dominance: Dollar has seen many competitors (Pound, Euro). However, the dollar seems to continue its dominance uninterrupted.
- Chinese currency: China runs a closed capital account. Most of the Renminbi reserves that are held outside China are by Russia.
Dollar-denominated assets
- Huge demand: Along with general acceptability as a medium of exchange for international trade, the U.S. dollar is also in demand because of demand for dollar-denominated assets worldwide.
- Hedge against currencies: The debt issued by the U.S. government is bought by the world as a hedge against currency fluctuations affecting valuation of reserves.
- Currency pegged to Dollar: Currencies are pegged to the U.S. dollar and a few countries use the dollar as their own currency.
You must be logged in to get greater insights. click here to login
Courses
Study
Notes
Home
Resources
More
