US Dollar to Remain Undisputed Global Reserve Currency for Foreseeable Future

14 page (7378 word) report published Mar 17, 2010
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About Moody's Global Credit Research

...Recent speculation about the future of the dollar as the world's reserve currency is, in Moody's view, unfounded. Despite the US's external deficits and dollar depreciation, we believe that the likelihood of the dollar losing its prominent role as a reserve currency remains very low for at least the next three to five years: + Regardless of the current state of US public finances, the economic and political factors underpinning the dollar's reserve currency status are still aligned in favour of the dollar and are likely to remain so for some time. + There are no plausible alternative currencies that are ready to take the US dollar's place as the global reserve currency. We do not consider the Chinese renminbi and the IMF's Special Drawing Right (SDR) to be credible alternatives. + Inertia and the interconnectedness of financial markets, not to mention the size of the global market for dollar-denominated debt, highlight the difficulties of a global switch from the dollar to another currency...

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