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The US Dollar
Report

The US Dollar

Still the Cleanest Dirty Shirt?

Amar Reganti
GMO, 2017
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Editorial Rating

8

Qualities

  • Analytical
  • Eye Opening
  • For Experts

Recommendation

In the post-World War II era, global policy makers depended on the US dollar as the global reserve currency. However, with the frenetic expansion of globalization, currencies such as the euro, yen and now even the renminbi have staked a claim as a potential competitor to US dollar dominance. Investment expert Amar Reganti explores the US currency’s rivals and the obstacles to their displacing the dollar and achieving reserve currency status. getAbstract recommends this insightful and detailed report to policy makers, executives and investors interested in understanding the current and future global currency architecture. 

Take-Aways

  • With the 2015 inclusion of the Chinese renminbi (RMB) into the basket of currencies that make up the IMF’s Special Drawing Rights, the RMB took another step toward global reserve currency status.
  • The euro’s lack of a unifying “fiscal union” makes its argument for reserve currency status problematic.
  • Digital currencies like bitcoin lack the fundamental characteristics of a monetary medium, as users can’t pay taxes with bitcoin, nor can central banks conduct monetary policy transactions with it.

About the Author

Amar Reganti is a member of GMO’s asset allocation team and former deputy director of the Office of Debt Management for the US Treasury. 

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