Wednesday, April 22, 2020

75 years ago US Dollar($) became International Reserve Currency: Will US Dollar dethrone after COVID-19 Crisis?


Coronavirus disease epicentre located at Wuhan city in China, but recovered from COVID-19, US ranks first in COVID-19 cases, and still fighting against it, nobody knows how long it will take. In this situation so many speculation on US dollar($)
 Is it a death of dollar supremacy?
Is it end of US dollar dominance?

For every crisis there is an opportunity after world war 1&2 European dominance and its currency Euro dominance decreased at that US dollar starts increasing.
 In 1944 after world war-2 US dollar($) declared as global currency by Breton woods. For last 75 years US dollar has been on the center stage, most of the countries reserve currency in US dollar only, hence called as International Reserve Currency.

In 1970 US dollar($) replace gold standards, but in the early 80's and period 1991-93 declined little and recovered.
By the end of 2006 Euro replaced dollar in many areas like foreign exchange reserves 29%-Euros ,66% dollars;cross boarder transactions 39% Euros,43% dollars; in this way Euro was competitor at that time but Euro strength tied to European Union(EU) strength. In the period of 2009-12 Euro strength started falling due to Eurozone CrisisOn 5th April,2020 Euro ahead of dollar i.e Euro/USD=1.0778. Currently for a short while euro starts increasing.
As of now China occupied digital currency place, Peoples bank of China has been working on digital currency for five years. In 2002 China's GDP 4% of the world Scarce disease started in China but that's not spread like Corona, because in 2020 China GDP 16% of the world's GDP, i.e 120 countries including US have trade relationship with it. But China yuan can't beat US dollar.

US former president George W. Bush wrote a book named "Treasure war" in 2013, Russia approached China  in 2008 to coordinate sale of government sponsored debt to generate financial crisis in America, but China declined.
Strength of US Dollar?
Transparency of US fiscal policies are strong aspect of dollar dominance. Natural resources, science and technology, patent rights and innovation of US companies all these dominance will play in strengthening the dollar. Cultural dominance, weapons of mass destruction all these factors make US dollar as supreme of all currencies. Though some European countries raising technical challenges, the countries like China also a good competitor in manufacturing sector, Russia in space mission operations and researches but these countries don't have geo economical supremacy, military supremacy, intellectual, innovations like US. Only few days of  health disaster can't effect the US dollar dominance.
Final Word:
Dollar dominance is not only an economical factor, it includes geo economical strength, political strength,military supremacy etc. Leads to US dollar dominance. Neither Euro nor yuan can not beat US Dollar dominance. US has clear enough to prevent competitors for dollar($).

No comments:

100Crore Delicious Haleem Over Ramdan Period|Eid Mubarak|

  100crore Haleem sold Only in Hyderabad. Delicious Haleem favourite mouth watering for all food lovers irrespective of religion. Haleem Hy...