[WHITE PAPER]
IS THE DOLLAR'S STATUS AS A RESERVE CURRENCY AT RISK?
By Refinitiv and Fathom Consulting
Are inflation, debt ceiling uncertainty, and weaponisation of the US dollar undermining its status as a reserve currency?
The US dollar is the benchmark against which all other currencies are judged. As a trusted, safe-haven asset, it is the currency that people want during a crisis. This is why economists usually refer to the dollar as the world’s ‘reserve currency’. This status affords certain privileges to both the citizens of the United States and its government. But, just as the previous holder of this title - the British pound - lost its reserve currency status to the dollar, there are now signs that the dollar’s status could be under threat, due both to domestic factors and to the rise of potential challengers. Using Refinitiv’s Datastream platform, the paper - commissioned by Refinitiv and written by Fathom - outlines the threat, responding to the following questions:
- What it means to have reserve currency status and what are the benefits that the US derives from it
- How domestic factors could affect the dollar’s international status?
- Who are the rising challengers? Can the progress of other currencies provide a potential threat to the dollar's status?
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