The U.S. dollar had its worst start to a year in more than five decades, as rising U.S. government debt and President Donald Trump’s tariff policies have eroded confidence in the U.S. economy and weakened the dollar in foreign exchange markets.
Yet the dollar will not be dethroned from its dominant position anytime soon, argues the economist Eswar Prasad in a recent essay for Foreign Affairs. The dollar’s success is “less a product of American exceptionalism than of fundamental economic, political, and institutional weaknesses in the rest of the world,” writes Prasad. “Unless that changes, the dollar will remain on a much longer leash than any currency should rightfully have.”
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