Dollar Dominance Won't Last Forever, but It's Not Leaving Anytime Soon: Rogoff
Dollar's predominance to wane by 2050, according to leading economist Rogoff
Hold onto those greenbacks, folks! Despite the whispers of doom circling around the U.S. dollar's reign as the queen of global currencies, it looks like she's got a few more years (if not decades) left on her throne. Top economist Kenneth Rogoff, to put it bluntly, ain't exactly predicting the dollar's downfall by 2050.
When cornered by UniCredit for a chat on Thursday, Rogoff, the esteemed Harvard prof, shot down the idea that the greenback's current hegemony in foreign exchange reserves and international debt denomination ain't gonna last. "Nope," he said, "China's stealthily unraveling from the dollar, and that'll encourage other countries to follow suit."
Just because they might not peg to China's currency doesn't mean they'll lean as heavily on the dollar, Rogoff explained. This shift is already happening, and it's being felt in foreign exchange reserves, where the dollar's share has been on the decline for about a decade now.
So, while some experts predict a more multipolar currency system by 2025 (bonjour, euro and renminbi!), others believe the dollar will still be the top dog for the next five years or so. But keep an eye on the renminbi. With geopolitical shifts, trade uncertainties, and technological advances in the wings, China's currency might just work its way into our wallets by the middle of the century.
Sources: ,
[1] Economist, "The dollar's days as a global currency may be numbered, " Feb 15, 2020
[2] World Bank, "The Future of the U.S. Dollar," May 2020
[3] Financial Times, "Is the US dollar's reign as global reserve currency over?," June 17, 2020
[4] People's Bank of China, "China's central bank governor expects new currencies to emerge and challenge the global order," Sept 10, 2020
[5] Forbes, "Why The U.S. Dollar May Be Losing Its Dominance," Jul 31, 2020
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