We are pleased to announce two new blog posts on the SUARA SEACEN Blog:
Rethinking the Dollar: The International Monetary System at a Crossroads
by Jeffrey Frankel, Nur Ain Shahrier and Donghyun Park
This blog explores whether the international monetary system is approaching a turning point, as cracks emerge in the dollar’s long-standing dominance and its associated “exorbitant privilege.” It examines recent trends in reserve diversification, the rising role of gold and digital currencies, the constraints facing alternative currencies such as the euro and renminbi, and how the actions of an increasingly unpredictable hegemon may hasten a gradual shift toward a more multipolar system, with important implications for global and regional financial stability.
Click here to read.
The End of Dollar Dominance
by Hanno Lustig and Meltem Chadwick
“The End of Dollar Dominance” argues that the dollar’s central role is being tested through a gradual repricing of the safety and liquidity services embedded in US Treasuries. It explains how the United States has long benefited from a convenience yield that financed large deficits at favourable terms, and it shows that key market indicators now point to erosion of this premium across hedged foreign sovereign, corporate-synthetic, and swap markets. The blog links these shifts to rising fiscal strain and institutional tail risks, and notes recent stress episodes in which higher Treasury yields coincided with a weaker dollar. It concludes with implications for central banks and reserve managers, especially in Asia, as the international monetary system becomes more multipolar.
Click here to read.
