The dollar’s status as the world’s main reserve currency could be eroded by economic woes, but other currencies remain far from being able to challenge its dominance, China’s top official newspaper says.
The People’s Daily echoes recent statements from the country’s officials that a weakened dollar could cut value of reserves, but voiced scepticism about the euro, saying it could be impeded by problems in the EU including high unemployment and disparate economic cycles among member countries which could undermine unified fiscal and monetary policies.
The paper’s commentary says some observers believe a relative decline in the reserve status of the dollar is unavoidable given the United States lagging productivity growth relative to emerging countries and it’s current account and fiscal deficits, but it also stressed that it will take a long time before any other currency stands a chance of displacing the US currency.
