King dollar will continue to reign supreme for 3 key reasons despite rising talk of de-dollarization
As the world's second largest economy, China has been working towardsIn 2016, the yuan was added to the International Monetary Fund's Special Drawing Rights basket of currencies, which serve as a supplementary international reserve asset. Other currencies in the basket include the US dollar, the euro, the British pound sterling, and the Japanese yen.to help extend the global reach of the yuan, having struck deals with Russia, Saudi Arabia, Brazil and Italy, among others.
One of China's key arguments when working with other countries is to"de-weaponize" the dollar, as the US has long used sanctions to target its adversaries, and those sanctions only work because of how globally entrenched the dollar is, withChina itself has been transitioning away from the US dollar, with the People's Bank of China stockpiling gold to an estimated 2,068 tons.
But LPL's chief global strategist Quincy Krosby offered three reasons why the US dollar's reign as the world's top global reserve currency is here to stay in a Monday note, and the reasons are rather simple. For a currency to ascend to the ranking of the world's top global reserve currency, it requires the three following traits:
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