Euro, dollar status should not be taken for granted -ECB's Lagarde
Reuters
Published Apr 17, 2023 11:17AM ET
Updated Apr 17, 2023 01:01PM ET
FRANKFURT (Reuters) -The United States and the euro zone should not take the international status of their currencies for granted as countries such as China and Russia seek to create their own systems.
The dollar's 80-year-old reign as the world's reserve currency is being called into question by some commentators in light of China's rise as a global power, burgeoning debt at home and geopolitical challenges to Western influence from Ukraine to Taiwan.
Lagarde said "a new global map" was being drawn, with some countries seeking alternative invoicing currencies such as the as the Chinese renminbi or the Indian rupee, accumulating gold or setting up their own payment systems.
"These developments do not point to any imminent loss of dominance for the U.S. dollar or the euro," Lagarde said in a speech. "So far, the data do not show substantial changes in the use of international currencies."
"But they do suggest that international currency status should no longer be taken for granted," she said at the Council on Foreign Relations in New York.
Around 60% of the world's foreign exchange reserves and international debt is denominated in dollars, with the euro a distant second at 20%, according to data compiled by the ECB.
U.S. authorities have so far dismissed the notion that the greenback's global primacy, born with the Bretton Woods agreement of 1944, was about to end and even suggested it could be bolstered by the launch of a digital dollar.
The ECB also hopes an electronic version of the euro could boost its use abroad, although it has cautioned this would also come with risks such as opening a gateway for money laundering or facilitating runs on weaker currencies at times of crisis.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.