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Economic Analysis: Theory and Practice
 

Competition of the world leading currencies: Features of the current stage

Vol. 20, Iss. 11, NOVEMBER 2021

PDF  Article PDF Version

Received: 14 October 2021

Received in revised form: 23 October 2021

Accepted: 4 November 2021

Available online: 29 November 2021

Subject Heading: ANALYSIS OF FINANCIAL CAPITAL

JEL Classification: G15, G18

Pages: 2074–2088

https://doi.org/10.24891/ea.20.11.2074

Vladimir K. BURLACHKOV Institute of Economics of Russian Academy of Sciences, Moscow, Russian Federation
vkburl@gmail.com

https://orcid.org/0000-0003-3206-1564

Subject. The article analyzes the competition of the world leading currencies in the global economy, specifics of the current stage, trends in the role of particular currencies in the global market.
Objectives. The purpose is to review the current positions of the U.S. Dollar, Euro and Yuan in the global financial markets, assess prospects for maintaining the leading role of the U.S. Dollar, development trends in the position of Euro and Yuan.
Methods. I applied the content analysis of available sources, provide a historical overview of issues under consideration, scrutinized the estimates of financial analysts.
Results. The paper unveils reasons for increased competition of the leading currencies (U.S. Dollar, Euro, Yuan) in the global foreign exchange market, which include an increase in the scale of payment transactions in the global financial and commodity markets. It also reveals trends in the use of particular currencies in foreign trade and financial transactions, evaluates prospects for the use of specific world currencies in the global economy.
Conclusions. At present, U.S. Dollar maintains its leading positions. However, in the future, an increase in the use of Euro- and Yuan-denominated transactions should be expected in the commodity and financial markets due to enlarged presence of Chinese companies in the global economy. Further development of European integration can ensure the expansion of the single European currency in the global financial market. The share of Yuan in foreign exchange reserves of central banks tends to increase. Private investors' demand for Yuan is also expected to grow.

Keywords: global currency, competition, financial market

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