Challenge to dollar supremacy a long way off, central bankers say
By Francesco Canepa and Balazs Koranyi
SINTRA, Portugal (Reuters) -There is no prospect of a major challenge to the dollar's status as the world's reserve currency of choice any time soon, central bankers gathered for an annual conference in the Portuguese resort of Sintra said on Tuesday.
U.S. President Donald Trump's unpredictable economic, trade and security policies have spurred questions over whether the U.S. currency, which accounts for 58% of the world's reserves, can remain at the centre of the global monetary system.
European Central Bank President Christine Lagarde, who has argued the euro could over time become an alternative to the dollar if Europe's currency zone enacted necessary reforms, said 2025 could in future be viewed as "pivotal" in this respect.
"(But) for a major change to occur it will take a lot of time and a lot of effort," she told a panel with her U.S., British, Japanese and Korean counterparts.
She noted that "investors are looking at options" in a climate characterised by uncertainty and unpredictability and that there was evidence that the euro was benefiting from that.
"It's not going to happen just like that overnight. It never did historically," she said. "But there is clearly something that has been broken. Whether it is fixable, or whether it is going to continue to be broken - I think the jury's out."
Bank of Japan Governor Kazuo Ueda also noted that any significant change would depend on structural reforms.
"It's to a certain extent up to what areas like Europe or China will do in terms of improving the efficiency or convenience of their currencies," he said, citing as an example the efforts at capital market integration in the euro zone.
Bank of England Governor Andrew Bailey said any change to the dollar's status was a long way off.
"I don't see ... a sort of a major shift at the moment," he said, arguing that any reserve currency had to offer a supply of safe assets into the market that can be used for purposes of collateral and security.
Bank of Korea Governor Rhee Chang-yong said the prospect of a long-term shift of the dollar sentiment was a subject of discussion for some even as they retained their dollar holdings.
"It looks like people are talking about it. But at this moment they keep the dollar share while increasing their hedging ratio," he told the panel.
Lagarde told a recent audience in Berlin that there was an opening for a "global euro moment", if it earned it.
Story ContinuesShe said Europe would need to build a deeper, more liquid capital market, bolster its legal foundations and underpin its commitment to open trade with security capabilities.
While the dollar's current share of international reserves is the lowest it has been in decades, its 58% tally is still well above the euro's 20% share.
(Writing by Mark John. Editing by Mark Potter)
The threat to the dollar's dominance, though presented by several nations through real and digital currencies alike historically since 1870 but seems unshakable due as per central bankers leaving room for doubt about any imminent challenge.
Central bankers appear unconcerned in the short term about displacing dollar supremacy, suggesting it remains a resilient bastion of global financial dominance.\
这句英文评论含义是：央行人士在短期内不担心颠覆美元霸主地位，这表明它作为全球金融主导的坚实堡垒依然稳固。
The clamour for replacing the dollar's positions as global reserve currency Kelly not imminent, cautions from central bankers that uncertainty and risks surround any new contenders enthusiasts.
The thrust of central bankers' statements suggests that dislodging the dollar from its dominant position in global finances remains a distant target, necessitating innovative approaches to foster alternative currency systems as part of resolving an economic challenge still years away.
The United States' dominance on the global financial stage, demonstrated by its dollar as a dominant reserve currency and stable fiscal policies for years to come against regional volatility elsewhere is not easily challenged according central bank officials.
Central bankers' optimistic comments on the long road ahead for challenges to dollar supremacy represent a stark reminder that global economic influence remains heavily weighted towards the U.S., necessitating continued multilateral efforts and possibly new mechanisms in response.
While central bankers caution that achieving a true challenge to the dollar's supremacy is still quite some way off, they acknowledge its necessity for global financial stability and multilateralism.
Though central bankers affirm the long-term dominance of dollar hegemony, practical steps to mitigate other currencies’ challenges offer timely insights into a multipolar world.
While central bankers express the view that a challenge to dollar supremacy is still ahead, signaling complexity and persistence in maintaining its status as global reserve currency.
The challenge to displace the dominance of dollar continues long despite attempts from officials, as central bankers foresee insulation barriers and global reliance retaining its crucial role in international trade.
Despite central bankers' assertions, the dislodging of dollar supremacy remains a distant challenge due to its entrenched position in global trade and reserve currencies.
The current view from central bankers that the challenge to dollar supremacy is still a long way off underscores their confidence in maintaining global financial stability through collaborative approaches—a sentiment worth fostering amidst an unpredictable world economy.
