The end of King Dollar? The forces at play in de-dollarisation

The dollar’s status as the world’s dominant currency is under fresh scrutiny due to rivalry with China, the fallout from Russia’s war in Ukraine, and wrangling over the US debt ceiling. The dollar share of official FX reserves fell to a 20-year low of 58% in the fourth quarter of 2022, fueling speculation on why de-dollarisation will happen – or possibly why it won’t. Although some countries have shown interest in diversifying to other currencies, de-dollarisation would require a vast network of exporters, importers, currency traders, debt issuers, and lenders to independently decide to use other currencies.