How dominant reserve currencies to the dollar? And for how long that will continue to dominate?

How dominant reserve currencies to the dollar? And for how long that will continue to dominate?

3001 2016

Size, stability and liquidity in financial markets the value of factors that influence the reserve currency
In the short term it will not be able «yuan» to replace the dollar as an international currency
The expected appearance of greater diversity in the cash reserve currencies and gradually turn away from the dollar
Growing green currency (dollar) first reserve currency in the world today, where passed a long trip before sitting astride on the throne of the global reserve currency, was not enjoyed by those prestige and importance all the time, which was preceded by many other world currencies so.
It is known that reserve currencies are constantly changing according to economic changes throughout history, and monitoring «Hao Match» glimpses of the history of the dominance of the US currency in advance some analysis about the prospects for retaining such dominance in the near future.
Pre-reserve currencies
Reserve currency prevailing changed almost every 100 years, and usually belong to the world's most economies stable and influential, and the name of «reserve currency» does not appear officially until the sixties of the 19th century, when Britain industrialized nations began in the creation of central banks and treasuries with pegs to gold, But this does not prevent the domination of a particular currency at times, it has been the reserve currency in three stages passed by the dollar's dominance as follows:
? The first phase: during the era of geographical discoveries was the currency Portuguese are the most dominant in the centuries 15 and 16, then the Spanish in the sixteenth and seventeenth centuries, with the massive expansion of the Ottoman Empire and its control of Constantinople (now Istanbul) in 1453 there has been an urgent need for the discovery of trade routes a new, thanks to the development of the navigation techniques in that era discovered by the Portuguese and after them the Spaniards new trade routes of up to Asia, Africa and the New World (the Western Hemisphere private Americas), so it became worked two countries are a prevailing in business dealings around the world at the time.

? Phase II: The Portuguese military bases in different parts of the world such as Africa, India, Malaysia, Japan and China, and with the breadth of their empire lost control as a result of their exposure to attacks from other private Netherlands, Britain and France countries, Portugal and Spain Union and tried in the face of challenges but Ambraturetehma collapsed in the middle of the 17th century and brighten the star of the Netherlands, which took control of its currency on world trade in the 17th and 18th century, helped by the first multinational company in history, the establishment of a «Dutch East India Company» for flavoring, which has become the largest private company in the history of the world in 1669 where possessed more than 150 merchant ship warship and 40 and 50 thousand workers and a special army consisted of 10 thousand troops, and provided revenues by 40% to shareholders.
But the war damaged the dominance of English on the company's spice market collapsed its currency to start with French currency dominance during the 18th century and the beginning of the 19, but the huge debt experienced by France caused a severe financial crisis led to the French Revolution.
? The third stage: the industrial revolution succeeded in Britain to establish «the empire that the sun never sets», who controlled the pound to more than half of international business dealings, and the Great Britain and the largest foreign investors in the world, but many countries have started to put protectionist measures customs such as fees for the protection of national products, which would lose control of sterling, which he maintained throughout the 19th century and beginning of the twentieth century even handed the torch to the dollar.
The brightness of the star of the dollar in the wake of the Second World War began climbing star dollar, when approved by world powers to apply the «Bretton Woods», the first full monetary system regulates monetary dealings between Independent States, which proved the global currency value against the dollar, which is linked to its value in gold system.

In 1971, the United States canceled the system pegs its currency to the dollar in gold is unique to the global financial transactions.
And the status of the dollar as a reserve currency gives an advantage to the government and American suppliers, as lower import costs for not having to re-convert the proceeds to other currencies, also allows the views of Americans and citizens to enjoy lower interest loans.
Also, the stability of the dollar is allowed to appreciate against other currencies, which hurts exporters, as it makes their exports more expensive on international markets and thus less attractive to buyers.
How long the dollar's dominance continue?
The United States is no longer the largest foreign investors in the world, China has hijacked this title, and instead of becoming the largest exporter of goods and services has become the largest proportion of debt in the world.
Nevertheless, the US economy still enjoys a relatively stable, while the dollar's share in trading foreign exchange markets have risen slightly since the global financial crisis.
Is the yuan candidate to replace the dollar?
According to «Hao Match», there are influential factors in the status of reserve currency are the size, stability and the value of liquidity to the financial markets, its state, and in this context the US capital markets remains the largest and more liquid than its Chinese rival.
Despite the Chinese government's efforts to develop the capital market, what slow development rate continues, the government intervention in the markets leads to instability, and that the Chinese currency (the yuan) have not been fully edited and is non-transferable fully in front of other global exchange of currencies.
In the short term it will not be able «yuan» to replace the dollar as an international currency, but is expected to fade the dollar's dominance gradually with the increase in trading Kallioan other currencies and the euro.

There are signs that the rise of the status of the yuan in the long term, such as the establishment of the Asian Bank for investment in infrastructure, regarded by many as an indication of the start of the end of the dollar and the control of the International Monetary Fund on the global financial arena also.

The United States is still a safe place to invest, but the impact of China on the Asian economy continues to sleep, is expected appearance of greater diversity in the cash reserve currencies and gradually turn away from the dollar.

And monitor the performance of the currency over the next 10 or 20 years will determine the fate of the US currency, which seized the foreign exchange markets for decades and whether it will apply the theory of «reserve currency change every 100 years».

© Al Anba 2016