The US dollar has shown the most significant decline in value in the last 50 years, yet it remains the leading currency in the global economy. This conclusion is presented in the International Monetary Fund’s annual report, the External Sector Report 2025.
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Dollar Maintains Leadership Despite Global Challenges
Despite significant changes in international trade and financial flows, the dollar has served as the primary currency for transactions in global trade, financial operations, and reserve accumulation for over 80 years. According to the IMF, this dominant position provides the US with advantages in the form of access to cheap loans, while also imposing additional responsibility on Washington for the stability of global markets.
“The American currency remains the primary unit of money for international trade, finance, and reserve accumulation, granting Washington an excessive privilege of cheap borrowing, while simultaneously increasing its excessive obligation to shield the world from shocks,” states the IMF’s External Sector Report 2025.
Since the collapse of the Bretton Woods system in 1973, the end of the Cold War in 1991, and the introduction of the euro in 1999, the dollar has not only maintained but also strengthened its position in international trade, risk hedging, and national reserve formation.
Challenges for the Dollar and the Role of Digital Currencies
Recently, amid escalating trade disputes, potential financial crises, and rising US national debt, some investors have begun to consider diversifying their currency reserves. Since the beginning of the year, the US dollar has depreciated by 8%, marking the largest semi-annual decline since 1973. However, this decline occurred after reaching a multi-year high in 2024.
The IMF also highlights the impact of digital currencies, particularly stablecoins pegged to the dollar. Their popularity may further cement the dollar’s dominance in the world, but at the same time, it raises the risks of cyber threats and financial instability. The Fund notes an asymmetry in the global economy: China is strengthening its position in trade, while the US remains a leader in the financial sector.
The IMF urges countries to avoid protectionist policies, as this could lead to increased multipolarity, rising volatility, and higher financing costs. Fund experts emphasize that such trends could inflict long-term damage on the global economy, even if the immediate impact on trade balances is minimal.
According to IMF estimates, a slowdown in the global economy will hit developing countries the hardest, particularly those like Ukraine, as their economies do not yet have a sufficiently resilient financial foundation.