The US dollar’s status as the primary reserve currency is as strong as ever. Global uncertainty and lasting economic disruptions from the Covid-19 pandemic and Russia-Ukraine War alongside the Federal Reserve’s aggressive monetary policy have reinforced the advantages the US dollar offers compared to other established reserve currencies in 2022, as well as newer options like cryptocurrencies.
Without suitable alternatives, demand for the US dollar can be seen in currency markets as the greenback has risen over 13% in 2022 while other major currencies have seen comparative drops (see Figure 1a).
