By Serkan Arslanalp, Barry Eichengreen and Chima Simpson-Bell
The US dollar has long played an outsized role in global markets. It continues to do so even as the American economy has been producing a shrinking share of global output over the last two decades.
But although the currency’s presence in global trade, international debt, and non-bank borrowing still far outstrips the US share of trade, bond issuance, and international borrowing and lending, central banks aren’t holding the greenback in their reserves to the extent that they once did.
Link: Dollar Dominance and the Rise of Nontraditional Reserve Currencies