Recently, there has been increasing research interest in the historical composition of central bank reserves. However, studies in this area is hindered by a lack of data, as such data spanning multiple centuries is only available for a small number of countries. This paper presents an empirical...

Global uncertainty and the COVID-19 pandemic have significantly impacted the integration of emerging economies into global financial markets. Post-pandemic, the Federal Reserve's interest rate hikes have drawn investor attention to relatively independent and stable currencies. This study...

This paper examines the role of foreign exchange reserve demand in mitigating inflationary pressures resulting from money supply growth in reserve currency issuing states (RCISs). Despite recurrent substantial monetary expansions in RCISs in response to recessions such as the 2000 Post-Dot Com...

The dominance of the U.S. dollar in the global financial system remains the key pillar of international trade and monetary stability but faces growing challenges in a rapidly changing world. Historically rooted in the Bretton Woods system and the establishment of the petrodollar system, the...

In this paper, we examine the prospects for, and implications of, the dollar's continued pivotal role in the international financial system. We find, first, that the dollar remains dominant by a wide margin and will likely retain its dominance for the foreseeable future-none of the other...

Several commentaries are written about de-dollarization. We analyze the factors which are contributing to de-dollarization and provide an alternative assessment. On the economic front, the US economy's reduced fiscal and financial capacity can strain economic trust in the dollar. The...

This 23rd annual review of the international role of the euro presents an overview of developments in the use of the euro by non-euro area residents in 2023. This was a year that saw continuing geopolitical tensions, increases in policy interest rates and inflation declining from high levels in...

This 23rd annual review of the international role of the euro presents an overview of developments in the use of the euro by non-euro area residents in 2023. This was a year that saw continuing geopolitical tensions, increases in policy interest rates and inflation declining from high levels in...

The inquiry into the global significance of the euro, which is the second most important currency in the international financial system after the US dollar (hereinafter, the dollar), should be treated as a priority in efforts to strengthen the EU’s strategic autonomy. The main obstacles...

In China, money, currency and payment transactions are manifestations of state sovereignty and political power. The primary objective of Chinese monetary policy is to maintain domestic stability, expand the scope of its own influence internationally, and reshape the global financial and monetary...

This paper provides insights into the determinants of currency choice in cross-border bank lending, such as bilateral distance, financial and trade linkages to issuer countries of major currencies, and invoicing currency patterns. Cross-border bank lending in US dollars, and particularly in...

In this paper, we examine the prospects for, and implications of, the dollar's continued pivotal role in the international financial system. We find, first, that the dollar remains dominant by a wide margin and will likely retain its dominance for the foreseeable future-none of the other...

This study examines the role of the Chinese renminbi (RMB) as an international anchor currency. After China abandoned its tight US dollar (USD) peg in 2005, the RMB found greater popularity as a reserve currency. This change in the RMB's role reflected China's growing presence in the global...

This article investigates fve safe-haven asset responses from 2014 to 2022, includ‑ ing the unprecedented COVID-19 crisis, Russian invasion of Ukraine, and sharp US inter‑ est rate increases of 2015 and 2022. We apply the unique approach of the multivariate factor stochastic volatility (MSV)...

This policy brief presents a new comprehensive dataset on the currency compositions of international reserves of 64 economies from 1996 to 2023. The dataset contains country-specific shares in international reserves for the eight major international currencies, i.e. the United States Dollar...

What explains the US dollar's role in the global economy and the tensions affecting its likely persistence? Most analyses start from Triffin's dilemma, which accurately captured specific but partial tensions of a global monetary system based on essentially fixed exchange rates, gold backing for...

After decades of increasing global economic integration, the world is facing a growing risk of geoeconomic fragmentation, with potentially far-reaching implications for the global economy and the international monetary system. Against this background, this paper studies how geopolitical...

In what ways might the digital renminbi (RMB), also known as e-CNY, bolster China's efforts to internationalize its currency? Utilizing Susan Strange's concept of currency negotiation and borrowing the concept of infrastructures from science, technology, and society studies, this article argues...

This article explores the dynamics of international currency competition and de-dollarization, focusing on the current dominance of the US dollar and potential challenges from the Chinese renminbi and BRICS countries. It reviews recent literature on currency statecraft, the political economy of...

As China's position in the global economy has gradually improved, the importance of debates on the role of the renminbi in the international monetary system has significantly increased. This paper uses bibliometric methods-Bibliometrix R-package and its web-based graphical interface...

The risk sensitivity of international capital flow pressures is explored using a new Exchange Market Pressure index that combines pressures observed in exchange rate adjustments with model-based estimates of incipient pressures that are masked by foreign exchange interventions and policy rate...

A B S T R A C TThe International Monetary Fund (IMF) created the Special Drawing Rights (SDRs) with 16-currencies in 1969 as a reserve asset and a unit of account. In 1980, the IMF modified the composition of and weights to calculate the exchange rate on 5-currency basket. This paper mainly...

This paper examines the implications of global currency wars for emerging economies. Currency wars, defined as competitive devaluations of currencies by countries to boost their exports and economic growth, have become increasingly common in recent years. The impacts of currency wars on emerging...

Written for a PIIE conference on the 50th anniversary of floating exchange rates, this paper deals with possible alternatives to a unipolar dollar-based system. It considers (1) measures of international currency use; (2) potential challengers to the dollar; (3) network externalities; and (4) the...

This article provides an analysis of the economic cost incurred by the world through the use of the fiat international reserve currency since the end of the 1971 gold standard system. The article uses the Quantity Theory of Money to provide an empirical manifestation of how reserve currency...

We develop a two-country business-cycle model of the US and the rest of the world with dollar dominance in trade invoicing, in cross-border credit, and in safe assets. The interplay between these elements - dollar trinity - rationalizes salient features of the Global Financial Cycle in the data:...

Western concerns that the renminbi could rival the dollar as an international currency contrast with underwhelming numbers in terms of global settlements in renminbi and with the experience of China's two main previous failed attempts to achieve renminbi internationalisation. However, China is...

The Currency Board in Bosnia and Herzegovina (BiH) uses the euro as a reserve currency in the conditions of a negative nominal interest rate on deposits with the ECB. In this paper, we investigated the impact of negative interest rates on deposits and negative yields on bonds denominated in euro...

China watchers have decried the emergence of the Cross-Border Interbank Payment System (“CIPS”) as a turning point in the move to dethrone the U.S. dollar. This Article situates CIPS, which clears and settles Chinese renminbi transactions, with other financial market infrastructures, drawing...

In this paper we highlight a new channel through which dollar fluctuations can become a self-fulfilling pro-cyclical force. We call this mechanism “Imperial Circle” as it makes the dollar the dominant macroeconomic variable in the context of the current international monetary system. At the...