Overview
- The dollar remains the top reserve currency even as its share has slipped since a 2001 peak, and the pace of change is slow.
- Dependence on the greenback exposes many developing countries to US rate moves, pricier imports when the dollar rises, and sanctions that can block trade.
- Governments are expanding local-currency trade, with India settling in rupees with Iran, Russia and the UAE as China and Saudi Arabia weigh similar deals.
- Central banks are building non‑dollar rails, with India proposing central bank digital currency (CBDC) interoperability for the next BRICS summit and with China’s CIPS offering a SWIFT alternative.
- Reserve choices are shifting as central banks keep buying gold, and some market analysts forecast a multipolar mix or gold‑linked digital units within five to seven years.