Market Extra: Will the U.S. dollar remain the world’s dominant currency? Washington and Wall Street are worried about ‘de-dollarization’ threat.

by | Apr 21, 2023 | Stock Market

A “de-dollarization” mania is gripping Washington and Wall Street. Wall Street analysts, corporations, policy wonks and others are trying to ascertain whether there is any real threat to the U.S. dollar’s standing as the dominant global currency, along with how changes in the international monetary system might impact markets and the U.S. economy.

Interest in the topic, according to Mark Sobel, a longtime Treasury official and Chair of the Official Monetary and Financial Institutions Forum and others, is being driven by several developments, including the looming U.S. debt-ceiling battle in Congress, a China-brokered deal between Saudi Arabia and Iran as well as Beijing’s “no limits” partnership with Moscow, and growing unease abroad about Washington’s dominance over the global financial system. See: Big question with dollar under fire from rival countries and currencies: What happens to markets if the greenback loses its dominance? “De-dollarization is one of the biggest things that our institutional clients are looking at,” said Jens Nordvig, a longtime currency-market strategist and founder of Exante data, which produces macroeconomic research for institutional clients, during a phone interview with MarketWatch. Data show that the U.S. dollar’s share of foreign currency reserves at central banks around the world has been declining slowly since the late 1990s. According to the latest data from the International Monetary Fund, the dollar’s share of central bank reserves stands at 58.4%, down from roughly 70% in the late 1990s. ‘A stunning co …

Article Attribution | Read More at Article Source

Share This