The dollar’s reserve currency role is extremely important for US economic policy

The dollar remains the dominant international reserve currency. This role is reinforced by the euro zone’s negative interest rates and the insufficient supply of financial assets for non-residents in China and Japan. The dollar ’ s reserve currency role is extremely important for US economic policy: if growth slows, it enables the United States to conduct highly expansionary fiscal and monetary policies, leading to massive fiscal and external deficits without any issue. Donald Trump’s determination to prolong the period of high growth receives a huge helping hand from the dollar’s reserve currency role.