BoE Governor Mark Carney Says Dollar to Keep Being World’s Reserve Currency

Bank of England Governor Mark Carney said Thursday that the U.S. dollar’s dominance over the global financial system is in no immediate danger, but stressed that changes are slowly under way as China’s financial opening proceeds.

Carney, in a speech at an Institute of International Finance (IIF) meeting in Tokyo, said that the greenback’s position remains strong even as emerging economies steadily increase their share of the global economy.

For example, he said their share of global GDP was more than one-third 36 years ago when the IIF was founded. And it is expected to rise to around 75 percent by 2030 from the 60 percent achieved during the most recent tightening cycle by the Federal Reserve, he said.

“But while the real economy, the real global economy is being reordered, the international monetary and financial system has barely begun its transition,” he said.

The dollar remains the “currency of choice,” he said, accounting, for example, for at least half of international trade invoices, two-thirds of global securities issuance and dominating two-thirds of foreign exchange reserves and external debt.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza