The latest on the dollar’s international currency status

Jeffrey Frankel, 6 December 2013

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As most people know, the general trend in the dollar’s role as an international currency has been slowly downward since 1976.

Topics: International finance
Tags: dollar, euro, foreign exchange, reserve currency, yuan

When did the dollar overtake sterling as the leading international currency? Evidence from the bond markets

Barry Eichengreen, Arnaud Mehl, Livia Chiţu, 23 May 2012

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The global economic and financial crisis has lent new impetus to discussions of the future of the international monetary and financial system. Some advocate moving to a multipolar system in which the US dollar shares its international currency role with the euro, the Chinese renminbi and/or the IMF’s Special Drawing Rights.

Topics: International finance
Tags: dollar, international currency

The rise of the renminbi as international currency: Historical precedents

Jeffrey Frankel, 10 October 2011

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All of a sudden, the renminbi is being touted as the next big international currency. Just in the last year or two, the Chinese currency has begun to internationalise along a number of dimensions. A renminbi bond market has grown rapidly in Hong Kong, and one in renminbi bank deposits. Some of China’s international trade is now invoiced in the currency.

Topics: International finance
Tags: China, dollar, renminbi, reserve currency

The ‘strong dollar’ policy of the US: Alice-in-Wonderland semantics vs. economic reality

Willem Buiter, Ebrahim Rahbari, 28 June 2011

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The strong-dollar policy is a US government policy based on the assumption that a strong exchange rate of the dollar is both in the US national interest and in the interest of the rest of the world. The policy was first enunciated by the then-Secretary of the Treasury Robert E Rubin, shortly after he succeeded Lloyd Bentsen as US Secretary of the Treasury on 11 January 1995.

Topics: Exchange rates, Macroeconomic policy
Tags: dollar, monetary policy, US

The Dollar: Dominant no more?

Barry Eichengreen, 10 January 2011

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If the euro’s crisis has a silver lining, it is that it has diverted attention away from risks to the dollar. It was not that long ago that confident observers were all predicting that the dollar was about to lose its “exorbitant privilege” as the leading international currency. First there was financial crisis, born and bred in the US.

Topics: Global economy, Monetary policy
Tags: dollar, International Monetary System, US

The dollar question: Where are we?

Kati Suominen, 9 July 2010

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The global crisis and US economic travails triggered a firestorm debate on the future of the global currency regime.

Topics: Global governance, International finance
Tags: dollar, global currency regime, reserves

What is the status of the international roles of the dollar?

Linda Goldberg, 31 March 2010

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By many measures, the dollar is the most prominent currency in the world. It plays a central role in international trade and finance as both a store of value and a medium of exchange.

Topics: Exchange rates, International finance
Tags: dollar, euro, exchange rate pegs

The exorbitant privilege from a global perspective

Maurizio Michael Habib, 29 March 2010

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The residents of the US pay relatively low interest on their liabilities to foreigners, while earning relatively high returns on their foreign assets. This positive “excess return” on net foreign assets – known as the “exorbitant privilege” of issuing an international currency – facilitates the sustainability of large negative external positions.

Topics: Exchange rates, International finance
Tags: dollar, exorbitant privilege, Net foreign assets

Memory and the dollar

Rebecca Hellerstein, William Ryan, 6 February 2010

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Since the Second World War, the dollar has been the currency used most commonly in financial, trade, and cash transactions worldwide. Whether that will remain the case is the subject of an intensifying debate in global financial circles.

Topics: Exchange rates, International finance, Monetary policy
Tags: dollar, euro, international currency

The new global balance – Part II: Higher rates rather than weaker dollar in 2010

Eduardo Levy Yeyati, Piero Ghezzi, Christian Broda , 16 October 2009

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In the early months of the crisis at the end of 2008, the US dollar rose sharply as US interest rates fell sharply (IMF 2009).

Topics: Exchange rates, Macroeconomic policy
Tags: dollar, global crisis, quantitative easing

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