Reserve Currencies in an Evolving International Monetary System

Alina Iancu, Gareth Anderson, Sakai Ando, Ethan Boswell, Andrea Gamba, Shushanik Hakobyan, Lusine Lusinyan, Neil Meads and Yiqun Wu
Additional contact information
Alina Iancu: International Monetary Fund
Gareth Anderson: International Monetary Fund
Sakai Ando: International Monetary Fund
Ethan Boswell: International Monetary Fund
Andrea Gamba: International Monetary Fund
Shushanik Hakobyan: International Monetary Fund
Lusine Lusinyan: International Monetary Fund

Open Economies Review, 2022, vol. 33, issue 5, No 5, 879-915

Abstract: Abstract Despite major structural shifts in the international monetary system over the past six decades, the US dollar remains the dominant international reserve currency. Using a newly compiled database of individual economies’ reserve holdings by currency, this paper finds that financial links have been an increasingly important driver of reserve currency configurations since the global financial crisis, particularly for emerging market and developing economies. The paper also finds a rise in inertial effects, implying that the US dollar dominance is likely to endure. But historical precedents of sudden changes suggest that new developments, such as the emergence of digital currencies and new payments ecosystems, could accelerate the transition to a new landscape of reserve currencies.

Keywords: Reserve currencies; Currency composition; International monetary system (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11079-022-09699-x

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