This website uses cookies to ensure you have the best experience. Learn more

Is It The End Of Dollar As World's Reserve Currency

1131 words - 5 pages

Is it the end of Dollar as world's reserve currency?

What is Reserve Currency?
A currency, held in considerable quantities by different governments, as part of their foreign exchange reserves. It is also used for the products traded in global markets such as oil, gold etc. Reserve currency is also called as ‘Anchor Currency’.
US Dollar as Reserve Currency:
Traditionally, US Dollar has been regarded as the reserve currency and for more than 50 years it has been the currency of choice used by various nations of the world to facilitate trade involving commodities such as petroleum, manufactured products and gold. This stature has had tremendous benefits for the U.S. financial system and ...view middle of the document...

A lot of this threat emanates from China, world’s 3rd largest economy. Seventy thousand Chinese companies are now doing their cross-border settlements in Yuan and thus freeing themselves from undertaking the foreign exchange transactions. Allowing Chinese banks, for their part, to do international transactions in Yuan will allow them to grab a bigger slice of the global financial pie.
Also, the status of dollar being safe haven is now lost mainly due to the financial crisis and the federal debt approaching 75% of US GDP.

Reasons for decline of US Dollar as Reserve currency:

Dollar Value Share of foreign exchange reserves (percent)

From the above graph, it is evident that the share of US Dollar as the world’s reserve currency is facing a gradual fall and has come down from 75 % in late 90’s to around 58% in the last quarter of 2011.
The same duration saw growth of Euro as emerging Reserve currency.
Euro Value Share of foreign exchange reserves (percent).
Also, last few years have also seen increasing use of Yuan in settling Chinese trade. Following shows the growing trend from the Q1 of 2010 to Q4 of 2011.
So based on these figures and statistics, we can enumerate some the reasons for the decline of Dollar as Reserve currency.
1. Dumping of Dollar as the reserve currency used for the trade by the Chinese, Japanese and BRICS nations.
2. Chinese and the Russians have been using their respective currencies for trade.
3. China and UAE have decided to ditch US Dollar and to use their own currencies in oil transactions.
4. Despite sanctions against Iran by the Western world, the trade with Iran continues to be important aspect of many nations. Indian and Iranian deal of payment in Gold for the oil transaction is one such example of that.
5. Increased stress from international institutions like IMF and UN pitching in for the emergence of a new world currency.
6. China is the largest importer of oil from the Saudi Arabia, importing 1.39 million barrels of oil every day. Also there has been considerable Chinese investment in Saudi Arabia for the development of oil refineries. Hence, there is a possibility that this growing partnership will take deal away from petrodollar.
Impact on US Economy:

Other Essays Like Is It the End of Dollar as World's Reserve Currency

2015 Is Not the End of Ukip

603 words - 3 pages 605 973, in 2010 919,471 and finally in 2015 a huge boom of widespread popularity tallying 3,881,129 votes which was the third highest number of votes out of all parties standing for election after the Tories and Labour. These array of statistics showing results over the past 4 General Elections has proved how this is not the end of UKIP nationally as it continues to grow with its support both through the public and through the increase of

Is the End Coming? Essay

2003 words - 9 pages Ezekiel 38:1-5 the bible reads almost like today’s headlines on the news. It speaks of “Rosh” (Russia) and “Persia” ( Iran) as allies against Israel in the End times. It is important to look at the standing government that exists in each of the countries. Russia is not known to harbor and ill will towards Israel so their involvement in a war with Israel would probably be based on their alliance with Iran. The leader of Iran’s name is

End of Life and the Ethics Behind It

1310 words - 6 pages doctors are trained to do, it is still a person’s right and freedom of choice to decide if that is what they want. Do people have a right to end their lives whenever they choose to?  If you apply rule utilitarianism to this question, then I believe that answer is yes. If you incorporate the rule that if they are terminally ill or suffering needlessly, that is. The theory of rule utilitarianism is the best, most ethical theory for this question

To investigate the trajectory of a small ball as it rolls off a surface which is

566 words - 3 pages Title : To investigate the trajectory of a small ball as it rolls off a surface which is inclined to the horizontal Objectives : To investigate the trajectory of a two dimensional motion. Apparatus and Materials: 1. Ramp 2. Wooden block 3. Pendulum bob 4. Plumb line 5. Marble 6. Wooden board 7. Carbon paper 8. Meter rule 9. Plasticine 10.Restort stand and clamp Setup

Metaphysical Premises And Types Of Liberal Ideology: Liberalism As The End And Liberalism As The Way

3739 words - 15 pages same as to negation of rational element in the history. The second of the two models was best represented by J.-P.Sartre and A.Camus. The world's absurdity, and the history's as well, leads to the opinion that a kind of individual revolt against oppressing circumstances is the only rational form of behavior. Strange as it may seem, the first of the two models is now associated with the neoliberal ideology, namely with that of F.Hayek. He does

Ibm International Business Machines Corporation (IBM) Is The World's Largest Manufacturer Of Information Systems And Equipment. IBM Produces Computers

2066 words - 9 pages ibmInternational Business Machines Corporation (IBM) is the world's largest manufacturer of information systems and equipment. IBM produces computers that range from large mainframes to portable laptops. The company also offers computer services that help customers operate information system. In addition, IBM supplies such hardware devices as disk drives and printers. It also produces software products for both business applications and consumer

The Contribution of Developing a Theory from This Standard of Care Is That It Can Express a New Unifying Idea About the Phenomenon of Peaceful End of Life for Terminally Ill Patients. It Allows for...

1831 words - 8 pages on what these terms mean.[3] Technology in education is most simply and comfortably defined as an array of tools that might prove helpful in advancing student learning and may be measured in how and why individuals behave. Educational Technology relies on a broad definition of the word "technology." Technology can refer to material objects of use to humanity, such as machines or hardware, but it can also encompass broader themes, including

End of Education Is Character

675 words - 3 pages source and to put in a clear perspective, understanding only the name and form of each person is different, all lives originated from the same source” said another friend. My wife said, “Whether we need it or not, we get a lot of advice from several sources throughout our life. We can take what we find useful and others we can learn to ignore. At the end of the day, listening to our own consciousness and making decisions based on what we

The End of Men

726 words - 3 pages . This is due above all its title “The End of Men”. It is easier provocative as it changes the very world vision, but it is sometimes also humorous when there are reproduced some of Ericsson´s statements. Since the article is provocative for its time, you can also see it as instructive, and as an inspiration for women to follow their goals. Hanna Rosin has thus achieved his goal with both writing and configuration of the article.

Why Are Most of the World's Species Tropical?

879 words - 4 pages about many factors such as competition, disturbance (natural and human disturbance) fragmentation, invasion and many others. It is difficult to test the separate causes and to test them individually and also to make hypotheses including all of them. The main theory at this time is the hypothesis of latitudinal gradients of diversity. (Stevens 1989) He produced a rule called ‘rapoport’s rule’ which states that “latitudinal ranges of plants and

The Importance of Analyzing Derivatives and Currency Exposure

2129 words - 9 pages banking systems’ liquidity crises worsened as the prospect of currency devaluation became more certain. As mentioned above, the first devaluations occurred in July 1997 and as of the end of February 1998, the extent of local currency depreciations against the US dollar were: the Thai baht (47 per cent), the Indonesian rupiah (75 per cent), the Malaysian ringgit (38 per cent) and the Philippine peso (43 per cent) (_Economist_, 1998). For the local

Related Papers

U.S. Dollar Is Still The Safest Currency In The World

1998 words - 8 pages and investor money is flowing to the reserve currency, the U.S. dollar.” Currency Advantage When it lowered the U.S. rating, S&P, the world’s largest provider of credit analysis, said the failure up to then of Democrats and Republicans to agree on budget cuts made the U.S. less creditworthy, downplaying the country’s ability -- unlike individual European nations -- to print as much money as it needs to pay its debts. Congress cleared a $1

End Of Race Is It Possible Essay

1365 words - 6 pages mitochondria, migration from one continent to another and racially mixed populations where the target is the mostly American state of Hawaii. Should the world be concerned about the end of singular genetic ethnicity of each race? And is it going to happen? Race most likely will disappear as we now know. It seems to have been defined as two general groups-white and black, distinct from one another by only color of complexion. The white race will not be

Is America The World's Largest Sponsor Of Terrorism?

1548 words - 7 pages means that we reject the spread of "war" rhetoric among ourselves because that rhetoric is a means both of policing the world and ourselves to an end that cannot produce anything but more policing, either by state-sanctioned means of terror--war, or by ad hoc terrorist groups. It means that we reject our state's consistent declaration of itself as above international law.   A just peace is thinking that saves. We can learn to make a just peace to save ourselves. We have to learn to make a just peace to save the world.  

New Rule Against Helmet To Helmet Contact And Big Hits: Is This The End To Exciting Football As We Know It?

1520 words - 7 pages , junior high, high school, or even college football. Nobody is forced to play in the NFL. The pro football players of today play the game for the love of it, oh, and who can forget the millions of dollars they get paid to do it. They are all also well aware of the injuries at risk in the sport they play, it’s not as if when they get hurt they are going to be super surprised that they did. And, those injuries that they might suffer from