Archive of Journal - Financing
Financing – scientific magazine for economy
ISSUE 2022, No. 2, Article 4, Year of publication: 13, June, 2022
The challenges to the us dollar dominance in international monetary system
Branka Topić Pavković, PhD*; Srđan Amidžić, PhD**; Marijana Đukić, PhD***
*PhD Associate Professor, University in Banja Luka, Faculty of Economics, Department for Accounting and Business Finance **PhD Associate Professor, University in Banja Luka, Faculty of Economics, Department for Accounting and Business Finance ***Master student
The status of the world’s reserve currency represents not only a big economic advantage to the issuing country, but it also reflects the strength of country’s economy and its participation in international production, trade and financial markets. A stable and convertible national monetary unit is considered to be a reliable economic measure of value and success of an economic system, particularly in monetary policy. Current global macroeconomic indicators point out to the fact that two big shocks, the Covid pandemic and the war in Ukraine, led to disturbancies on the raw material and energy sources market and contributed to high inflation rates in majority of countries. It also influenced the status of international currencies in monetary system. Simultaneously, developing countries, predominantly China, has been increasing its international influence, has strong economic growth and is expected to strengthen its military and political influence in future. This study will try to depict the role of the US dollar as the world’s reserve currency through time dimension and its status in the changed global market conditions. The main goal of this study is to analyse tendencies and challenges to the US dollar international dominance and whether there have been some changes in the hierarchy of the leading world currencies. The results show the drop in the US dollar’s share of the total world reserves due to the consequences of the recent crises and also to the increase in the share of other currencies whose issuing countries have gained increased importance in creating global economic flows.
Keywords: world’s reserve currency, international monetary system, dollar, crisis