World’s currency reserves – level 2
02-05-2023 15:00
Since the Bretton Woods Conference in 1944, the US dollar has been the world’s main reserve currency. This means that most global currency reserves are in dollars.
As a result, there is demand for dollars, which boosts its value and makes imports cheaper. The US became a nation that imports more than it exports. But there are signs of change. In 2001, 73% of the world’s reserves were in US dollars, but now it is 58%. This trend accelerated when the US froze Russia’s dollar assets after the invasion of Ukraine.
The Chinese yuan gained some status, but it still represents only 2.7% of global reserves. The Japanese yen increased from 3.5% in 2014 to 5.5% currently. Most analysts believe that no currency will replace the dollar yet, but surely it is important to watch the changing trends.
Difficult words: boost (to improve or increase), accelerate (to speed up), asset (what a person or organization owns).
You can watch the original video in the Level 3 section.
What are the factors that impact the US dollar's value and place as the world's main reserve currency?
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