Source: United Daily
Author: Shen Wenhe
Recently, the international reputation of the US dollar has attracted much attention. In addition, Silicon Valley Bank and other community banks have closed down, making the global financial market deeply disturbed.US Finance Minister Yellen once said that economic sanctions on Russia and other countries may endanger the dominance of the US dollar.On the other hand, Russia, Saudi Arabia, Iraq, Brazil and other countries all intend to use RMB settlement international trade.As the internationalization pace of RMB accelerates, has the US dollar dominant status really declined?
In the U.S. bond market, the national bond market has died, and the yield of government bonds has become the price benchmark for issuance of other bond issuance.Although the national bond portfolio held by foreign investors accounts for about one -third of the market value of government bonds, foreign investors have an important impact on the depth of market depth, breadth and market atmosphere of the U.S. Treasury bonds, and play an active role in the process of issuance.
From 2009 to 2014, despite the overall operation of US interest rates, foreign investors have increased their holdings for six consecutive years; official reserves from 2009 to 2012 are absolute main forces, which reflects the 2008 financial crisis and subsequent periods.The institution hopes to increase foreign exchange reserves to deal with various economic incidents, but from 2013 to 2014, foreign private institutions increase their holdings of US Treasury bonds.
In the middle of 2015 to 2022, except for 17 years, foreign official reserve management agencies have begun to reduce holding US debt, especially in 2021 and 2022.The main investment institution of debt.The purpose of official foreign exchange reserves to hold US debt is to maintain the stability of the currency exchange rate of the country, meet the needs of international revenue and expenditure, and other. The purpose of foreign private institutions to hold US debt is to meet the supervision needs and maintain the stability of asset portfolios.
The essence of capital is profit -seeking, and foreign capital flowing into the United States is no exception.Like domestic investors, foreign investors will adjust their investment positions based on the changes in the capital market.Foreign investors hold the status of US dollars assets comprehensively reflecting investment income, investment losses, additional investment, and capital evacuation.
At the end of January this year, foreigners holding US dollar assets are at the second highest level in history, indicating that their willingness to hold US dollar assets has not decreased.The value of foreign investment portfolio was recorded at a record high in 2021, but with the sharp adjustment of the capital market last year, it fell to US $ 23.63 trillion (S $ 3.1 billion).Dollar.
After all, US dollar assets are financial assets, and naturally they should examine their value attributes based on financial market rules.The economic and financial status of the United States determines that the US dollar assets are still loved by the market that are loved by the market, so the international status of the US dollar is difficult to shake.
However, international finance is always in dynamic changes.With the changes in the flow of world trade, the flow of capital, and the flow of human capital, the international status of the large country's currency will always change.
The national fiscal policy and monetary policy are the foundation of maintaining the international reputation of the currency, which means that the currency issuer must have international responsibilities. Otherwise, once the US dollar is excessively consumed as an international general currency credit, the status of the US dollar international hegemony will be at stake sooner or later.
