How a Country Loses Its Currency Reserve Status

How a Country Loses Its Currency Reserve Status
A U.S. dollar note in front of a stock graph in this picture illustration on Nov. 7, 2016. Dado Ruvic/Reuters
Daniel Lacalle
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Commentary

The U.S. dollar enjoys its world reserve currency status due to numerous factors: legal and investor security, an open and transparent market, as well as independent institutions with checks and balances that limit political power and strengthen the country’s currency in relative terms.

Daniel Lacalle
Daniel Lacalle
Author
Daniel Lacalle, Ph.D., is chief economist at hedge fund Tressis and author of the bestselling books “Freedom or Equality” (2020), “Escape from the Central Bank Trap” (2017), “The Energy World Is Flat”​ (2015), and “Life in the Financial Markets.”
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