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.
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