During an interview with the Fox Business Network on Wednesday, Treasury Secretary Janet Yellen answered a question on how the U.S. is countering experiments in some parts of the world to move their trading away from the U.S. dollar by saying that “we continue to run an economy where we have a commitment to low inflation and solid economic performance and that underpins the dollar’s use as a reserve currency.”
Fox Business White House Correspondent Edward Lawrence asked, [relevant exchange begins around 2:50] “Brazil has a deal with China not to trade in U.S. dollars. We’re seeing a number of countries now not trading in U.S. dollars, and that seems to be growing around the world. How is the U.S. countering these moves, and are you concerned about chipping away at the reserve currency status?”
Yellen answered, “I think the dollar has always been, and I believe will remain, the most important reserve currency. There really is no rival in terms of the depth of U.S. financial markets, the liquidity of U.S. treasuries, the institutional and legal structure underpinning the use of the dollar and its broad acceptability. There are countries that would ideally like to trade in other ways, and we are seeing some limited experiments in different parts of the world. But there is no broad-based move away from the dollar and I believe it’s critically important that the dollar remain the world’s reserve currency.”
Lawrence then followed up, “Are we countering those moves in the U.S.?”
Yellen responded, “Well, we continue to run an economy where we have a commitment to low inflation and solid economic performance and that underpins the dollar’s use as a reserve currency.”
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