The Dollar’s Full-Spectrum Dominance

By CARLA NORRLÖF

Measuring dollar dominance requires a closer look at the many functions – from medium of exchange to unit of account and store of value – the greenback serves outside the US. Governments and monetary authorities use the dollar to intervene in foreign-exchange markets, to hold official reserves, and as a pegging currency. Private actors, meanwhile, rely on it as a vehicle currency, for invoicing and settlement of trade, and for investment purposes. The interplay between these different actors and roles has propelled the currency to its hegemonic position