By: Nghiinomenwa-vali Erastus
A summary done by the Bank of Namibia last week shows that the USA dollar’s dominance as a global reserve currency has eroded from over 70% in 2000 to 59% in Q1 2024. The USA dollar has been the dominant/principal reserve currency – where central banks stack it up in large quantities and use it to settle international transactions and debts.
The dollar dominance is aided by its use for international payments and oil transactions, and also most of the debts are denominated in dollars. Thus increasing the demand for the US dollar and aiding its value. The Bank of Namibia analysis shows that the US dollar-denominated assets comprise about 59% of global foreign currency reserves; the next largest share is the euro at 20%.
At the same time, 64% of world debt is denominated in dollars, meaning that most of the issued debts are in the US dollar and will be repaid in such.
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