Fed Cements Dollar Dominance, Fueling Record Overseas Borrowing
- Central bank swap lines played key role during the crisis
- Dollar dependency creates risks if greenback strengthens
Photographer: John Moore/Getty Images
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Overseas borrowers have flocked to the dollar this year at a record pace, with sovereigns from Indonesia to Colombia and companies from Nissan Motor Co. to Manila’s water utility racking up sales of $1.29 trillion.
It’s a key economic takeaway from the Covid-19 crisis: just as happened in the wake of the global financial meltdown of 2008, the dollar is cementing its role as the world’s dominant currency even as unilateralist policies from President Donald Trump rile allies and rivals alike.