From CNBC – some good graphics in this presentation and an interview with Eswar Prasad, an economist at the Brookings Institution and professor at Cornell University. Quote below:
“So here’s the paradox. The rest of the world despises how dominant the dollar is, yet they go to the U.S. dollar, because there really isn’t much of an alternative,”
Some facts about the US Dollar –
- 60% of the world’s central banks’ foreign exchange reserves in US dollar-denominated assets.
- 40% of consumers use the US dollar as a payment currency worldwide.
- 60% of international debt and 50% of loans globally is in US dollars.
- US dollar – still the main currency to buy and sell commodities such as oil.
“This is ultimately going to entrench the dollar’s dominance even further,” Prasad said. “That is certainly a serious problem for low-income countries that have high levels of foreign debt, especially dollar-denominated debt.”