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Decline in dollar’s dominance
March 29 , 2022
875 days
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- The dollar’s share of global reserve currencies has been in a steady decline over the past 20 years.
- This is because the Central banks turn to nontraditional currencies, including the renminbi, to diversify their holdings.
- Reserve managers have moved out of dollars in two directions, with one quarter headed into the renminbi and three quarters into currencies of smaller countries.
- The findings are in a new paper issued by the International Monetary Fund titled: “The Stealth Erosion of Dollar Dominance: Active Diversifiers and the Rise of Nontraditional Reserve Currencies.”
- It was co-authored by Serkan Arslanalp of the IMF, Barry Eichengreen of the University of California Berkeley, and Chima Simpson-Bell also of the IMF.
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