Bruno Pedro

Found at “The end of King Dollar? The forces at play in de-dollarisation | Reuters” on 2023-05-25 17:56:40 +02:00.


It’s interesting to see the effort that’s been taken to kill the US dollar. This is a long-term game that’s still going to take some time. However, its repercussions are yet to be fully understood. One is that US dollars become more and more rare outside of the United States.

The dollar share of central banks’ foreign reserves in the final quarter of 2022 did hit a two-decade low, but the move has been gradual and it is now at almost a similar level as 1995.

Another obvious repercussion is that countries stepping away from the US dollar face a sudden increase in exchange rate volatility. Whether you like it or not, having a currency indexed to the US dollar creates stability.