Despite growing talk of a decline in the US dollar's dominance of the global financial system, experts at Standard Chartered Bank believe that actual indicators do not reflect a trend toward abandoning the US currency, but rather point to what they describe as 're-dollarization,' driven by sustained demand for dollar-denominated assets and the continued reliance of companies and investors on the dollar as a primary financial safe haven.

This view comes at a time when the dollar's share of global foreign exchange reserves fell to about 57% in 2024, compared with 71% in 1999, its lowest level in a quarter century, amid some countries' expanded use of local currencies, gold, and digital currencies in international trade.

However, the bank's experts, as reported by Fortune magazine, believe that this decline in reserves does not mean the dollar has lost its global status, stressing that investment flows and holdings of the US currency still support its position as the world's most important reserve and funding currency.

Wed, 15 2026

Divya Devesh, co-head of foreign exchange research for ASEAN and South Asia at Standard Chartered Bank, said the bank does not adopt the 'de-dollarization' hypothesis, but rather sees markets experiencing an opposite trend of 're-dollarization.'

He explained that this trend is evident from exporting companies keeping their revenues in dollars instead of converting them into local currencies, along with continued inflows of investment into US stocks and assets.

Devesh cited Taiwan as an example, which converts only two dollars out of every 100 dollars of its export earnings into the Taiwanese dollar, while retaining the rest of its revenues in US dollars, indicating continued confidence in the greenback.

Gold and yuan do not change the equation

This view contradicts analyses that expect the dollar's influence to wane due to rising US government debt, expanded use of economic sanctions, and growing use of the Chinese yuan and local currencies in some trade exchanges.

Central banks, particularly in Asia, have also increased gold purchases to diversify reserves and reduce reliance on the dollar. The People's Bank of China continued buying the yellow metal for several consecutive months, while the Reserve Bank of India repatriated about 100 tons of gold to its domestic vaults.

Despite this, economists at Standard Chartered believe these moves do not mean there is a viable alternative capable of competing with the dollar at present, especially given the depth and high liquidity of US financial markets.

Thu, 16 2026

Lack of alternative supports the US currency

Eric Robertsen, chief strategist and global head of research at the bank, said investors may voice concerns about US debt, fiscal deficits, or economic policies, but the problem lies in the absence of an alternative that offers the same advantages as the dollar.

He added that any investor deciding to sell dollars would have to buy another currency, but the currently available options do not provide the same level of liquidity and reliability, limiting the prospects for a dollar decline in the near term.

Robertsen considered that the US bond market, not the currency market, better reflects concerns about the US fiscal position, affirming that the dollar will retain its safe-haven role in the short and medium term.

US economy attracts capital

The bank pointed out that the resilience of the US economy and the Federal Reserve's continued maintenance of relatively high interest rates have helped restore the attractiveness of US assets, after a wave of dollar selling that markets witnessed following the announcement of tariffs last year.

Devesh explained that the dollar's strength is linked not only to the boom in the artificial intelligence sector, but also to improved productivity in the US economy across multiple sectors, which boosts corporate profits and attracts more foreign investment.

He concluded by noting that continued global demand for US stocks, bonds, and assets is the most influential factor supporting the dollar, arguing that talk of a decline in its global status is still premature given the absence of an alternative capable of fulfilling its role in the international financial system.