Forbes Media Chairman Steve Forbes takes issue with the administration’s inflation policy regarding Mr. Kudlow.
Christopher Waller Federal Reserve Board In his remarks Thursday, he outlined the rationale for the world to continue using the U.S. dollar as the primary reserve currency for international trade.
“Recent commentary warns of possible decline in state status.” USD At a conference hosted by the World Interdependence Center in Nassau and the University of the Bahamas, Waller raised concerns about the impact of sanctions against Russia, U.S. political dysfunction, the rise of digital assets and China’s efforts to strengthen its use of the renminbi. He said that .
Waller further said that none of these concerns have led to a noticeable decline in the dollar’s “outsized” role in the global economy, including the increased use of digital assets such as stablecoins that are overwhelmingly tied to the dollar. The trend was also added. The international popularity of the US dollar continues to grow.
“The US dollar, accounting for about 60% of global foreign exchange reserves in 2022, is by far the dominant reserve currency.The dollar’s next major competitor is the euro, with a share of about 20%.” Waller said in his remarks.
Could the US dollar lose its reserve currency status for China?
The US dollar is the world’s main reserve currency, accounting for approximately 60% of all foreign exchange reserves in 2022. (Photographer: Andrew Haller/Bloomberg via Getty Images/Getty Images)
“Although some point out that the proportion of foreign exchange reserves held in dollars is decreasing, the dollar share has actually remained largely unchanged since the mid-1990s, although it has declined slightly since the mid-2000s. .Also, while the proportion held in dollars is increasing, the share of the renminbi is small at about 2 percent,” he explained.
Waller added: “Since the mid-2000s, there has been gradual diversification into reverse currencies, but we also have a wide range of investments in other currencies, such as the Canadian dollar and the Australian dollar.”
“America’s adversaries have few realistic alternatives to the dollar,” the Fed chief said. Famous key currencies The euro, Japanese yen, and British pound are all issued by close allies of the United States that participated in the sanctions against Russia. ”
The true value of the US dollar: strength, fluctuating currency
US Federal Reserve President Christopher Waller said the US dollar is likely to remain the world’s main reserve currency. (Photographer: Bess Adler/Bloomberg via Getty Images / Getty Images)
He added that when international financial markets are concerned about stability, investors and governments seek stability. safe haven To stabilize asset values, you typically need to rely on the US dollar.
“When this happens, there is almost always a ‘flight to the dollar’, increasing demand for USD assets. We saw this in 2008 and in 2020, as the USD is the world’s reserve currency. “It has been, and will likely continue to be, that in times of global stress, the world runs toward the dollar, not away from it,” Waller explained.
“I don’t think the U.S. dollar will lose its status as the world’s reserve currency anytime soon, nor do I think its dominance will diminish significantly.” trade and finance” Waller said in conclusion.
China’s yuan is seen as a potential rival to the dollar, although it makes up a small portion of global foreign exchange reserves. ((Photo illustration by Sheldon Cooper/SOPA Images/LightRocket via Getty Images) / Getty Images)
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He added: “Recent developments that some have warned could threaten that position have actually strengthened it, at least so far.”
Reuters contributed to this report.
