USD Reserve Currency Status
The cluster discusses the US dollar's role as the world's reserve currency, its economic benefits to the US, risks of losing that status due to sanctions and de-dollarization, and potential successors like RMB or ruble.
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The USD is currently 62.70%[1] of all currency reserves. If you lose the ability to trade in dollars you are screwed and the US knows this.[1] https://en.wikipedia.org/wiki/Reserve_currency
It's becoming 'too valuable' in USD. There are other currencies, and the world does NOT in fact turn around US.
It's an issue if the dollar looses it's reserve currency status.
Basic question: why is it bad for the US if the dollar stops being the reserve currency?
Because the US dollar is the reserve currency of the world. This won't work if you're an isolated economy with a barely traded currency.
Well, what do you expect? The US over the past several decades has effectively crippled economies for its own interests by cutting off USD access. When you do this to a non-trivial number of countries they get around it by trading among themselves and dumping the USD for their own currencies. There are many countries including India, Japan, Korea, China, Russia, etc who are opening up bilateral or trilateral agreements to trade in their own currencies bypassing the USD. The US has pissed off a s
It makes US Dollars. So, as long as the rest of the world is willing to save in USD, keep doing it.
That's a consequence of being world's reserve currency
This kind of depends on US Dollar hegemony, doesn't it? What happens if the Dollar loses prominence?
The dollar is strong because it is the global reserve currency. As more countries move away from the dollar due to factors like our use of sanctions, runaway debt, and a general shift towards physical asset stores of value, the dollar has room to rapidly weaken.