Economists at Commerzbank discuss the Dollar’s status as a reserve and trade currency.
No threat to the Dollar’s special status
The fact that China has extended its economic and political power within the Community of Latin American and Caribbean States (CELAC) at the expense of the EU illustrates that the Renminbi will remain part of the debate about the de-Dollarisation despite it being so far behind when it comes to its use for international payment transactions. Paradoxically that could also stabilise the outstanding status of the Dollar as the dominant reserve and trade currency for years to come.
A relatively rapid change to a system that is less Dollar-centric would probably only be possible with the help of the Euro gaining significance. That seems unlikely for now. However, the Renminbi still faces a lot of catching up to even reach the Euro’s position, which would probably require far-reaching changes to the Chinese financial and economic system. Until that seems imminent the Dollar’s special status is unlikely to be seriously at risk.