2.1 Dollar Dominance in the International System

Question 1

Dollar Dominance in the International Reserve system

Answer 1

The article discusses the gradual decline of the US dollar’s dominance as the primary global reserve currency. Although the dollar remains the top reserve currency, central banks are increasingly diversifying into nontraditional currencies like the Australian dollar, Canadian dollar, and Chinese renminbi. Despite geopolitical tensions and financial sanctions, this shift has been gradual, with digital finance and diversification driving the trend. The renminbi has gained some ground, though its momentum has recently stalled. Overall, the reserve system is evolving, but no dramatic acceleration away from the dollar has been observed.

Question 2

Which traditional reserve currency is mentioned in the article?

Answer 2

Euro (EUR)

Question 3

What is one of the reasons for the decline of the US dollar as the dominant international reserve currency?

Answer 3

The development of new digital financial technologies

Question 4

What country has been promoting the internationalization of its currency, the renminbi?

Answer 4

China

Question 5

What is the main topic of the article?

Answer 5

The decline of the US dollar as the dominant international reserve currency

Question 6

Increased geopolitical risk and global economic policy uncertainty motivated central banks to increase their gold reserves in the last 5 years.

Answer 6

True

Question 7

Russia’s fear of holding US dollars in its central bank reserves stems primarily from geopolitical concerns and the potential for economic sanctions.

Answer 7

True

Question 8

Has the US dollar completely lost its status as the dominant international reserve currency?

Answer 8

No