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On The Future Of The Global Foreign Exchange Reserve’ System

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  • Ramona Orastean

    (Lucian Blaga University of Sibiu, Faculty of Economic Sciences)

Abstract

US dollar is currently the most important currency in which foreign exchange reserves of different countries are set up, it being found both at the central banks and international financial institutions. Only very liquid currencies, stable and acceptable as a means of payment in a large economic area have the potential to become major currencies in which are maintained foreign exchange reserves. Ten years after the euro was launched, the US dollar’ share in foreign exchange reserves decreased by 7%, that don’t point to a significant diversification away from the US dollar in central bank assets over the past decade. But now, the US dollar’s position is no longer so secure. This paper explores different views on reserve currencies and tries to answer the question what kind of reserve currency do we need in order to ensure the stability of the global financial system.

Suggested Citation

  • Ramona Orastean, 2009. "On The Future Of The Global Foreign Exchange Reserve’ System," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 4(4), pages 121-128, december.
  • Handle: RePEc:blg:journl:v:4:y:2009:i:4:p:121-128
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    Keywords

    reserve currency; US dollar; euro; currency basket;

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