Reserve Currencies in an Evolving International Monetary System

Despite major structural shifts in the international monetary system over the past six decades, the US dollar remains the dominant international reserve currency. Using a newly compiled database of individual economies’ reserve holdings by currency, this departmental paper finds that financial links...

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Bibliographic Details
Main Author: Iancu, Alina
Other Authors: Anderson, Gareth, Ando, Sakai, Boswell, Ethan
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2020
Series:Departmental Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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520 |a Despite major structural shifts in the international monetary system over the past six decades, the US dollar remains the dominant international reserve currency. Using a newly compiled database of individual economies’ reserve holdings by currency, this departmental paper finds that financial links have been an increasingly important driver of reserve currency configurations since the global financial crisis, particularly for emerging market and developing economies. The paper also finds a rise in inertial effects, implying that the US dollar dominance is likely to endure. But historical precedents of sudden changes suggest that new developments, such as the emergence of digital currencies and new payments ecosystems, could accelerate the transition to a new landscape of reserve currencies