Why is US dollar considered to be a international currency? . Y not ot...
Https://youtu.be/Z8K3i9ZVxuc
maybe u find the answer by clicking on this youtube link....
Why is US dollar considered to be a international currency? . Y not ot...
The US dollar is considered an international currency for various reasons which include its stability, wide acceptance, and its role as a reserve currency. Let's delve into the details:
Stability:
The stability of a currency is vital for it to become an international currency. The US dollar has been historically stable due to the strong and stable economy of the United States. This stability is attractive to individuals, businesses, and governments as it minimizes the risks associated with currency fluctuations.
Wide Acceptance:
The US dollar is widely accepted around the world, making it convenient for international transactions. Many countries, especially in developing economies, prefer to use the US dollar as a medium of exchange for international trade. This wide acceptance is due to the dominance of the United States in global trade and its position as the largest economy.
Reserve Currency:
The US dollar also serves as a reserve currency, which means that central banks and governments hold significant amounts of US dollars as part of their foreign exchange reserves. This status as a reserve currency provides stability to the US dollar and increases its demand globally. The US dollar's reserve currency status is a legacy of the Bretton Woods system established in 1944, where the US dollar was pegged to gold and other countries fixed their exchange rates to the US dollar.
Global Trade and Financial System:
The dominance of the United States in global trade and the international financial system plays a crucial role in the US dollar's status as an international currency. Many commodities, such as oil, are priced in US dollars, and international trade is often conducted in US dollars. Additionally, major international financial institutions, such as the International Monetary Fund (IMF) and the World Bank, use the US dollar as their primary currency for transactions.
Conclusion:
In summary, the US dollar is considered an international currency due to its stability, wide acceptance, reserve currency status, and the dominant role of the United States in global trade and finance. These factors have contributed to the US dollar's position as the primary currency for international transactions and have solidified its status as a global currency.