The share of the dollar in global transactions is at a historical high. Will the dollar lose its status as the world’s primary currency?
Despite predictions that the dollar may lose its role as the world’s currency, its share in international transactions is at a historical high of 88%, according to strategists at JPMorgan. However, they note that the yuan’s share in global transactions has grown to a record 7%.
Experts say that de-dollarization is still occurring in the global economy, driven by rising interest rates in the US and the use of sanctions against some countries, including Russia, which has led the BRICs countries (Brazil, Russia, India, China, and South Africa) to challenge the dominance of the dollar.
However, despite this, the use of the dollar in transactions has increased, and its share remains high. Major currencies competing with the dollar, such as the euro, are losing ground. The euro’s share in global transactions has decreased by 8% over the past 10 years, reaching a historic low of 31%.
The share of the dollar in central bank reserves has also declined but remains at a record high of 58%. However, if gold is taken into account, its share has increased to 15% of total reserves.
Although the yuan’s share in global transactions has increased, its use is still limited by capital controls in China. Experts do not expect this situation to change in the near future.
Analytical conclusion: Will the dollar lose its status as the world’s primary currency?
Despite de-dollarization, the dollar’s share in international transactions continues to increase and is at a historical high. This is due to major alternative currencies, such as the euro, losing ground. The yuan’s share in global transactions has grown, but its use is still limited by capital controls in China. The share of gold in global reserves is also increasing. Significant changes in the use of different currencies in international transactions are not expected in the near future.