De-Dollarization? Not So Fast

Contrary to some popular concerns regarding countries potentially reducing their reliance on the U.S. dollar to be threatening to U.S. dollar dominance as a global currency (often labeled “de-dollarization”), this paper presents evidence that through early 2023 even after events like the globally destabilizing COVID-19 pandemic and the 2022 Russian invasion of Ukraine, the U.S. dollar seems no less prevalent in the currency denomination of central bank currency reserves, foreign exchange transaction volume, denomination of global debt securities, and the invoicing of trade. These findings have implications for reserve currency resilience, U.S. dollar dominance, international spillovers of U.S. monetary policy, and U.S. government borrowing costs.