The dollar's share of global debt is back to where it was when the euro launched

The US dollar's share of international debt has not steadily declined, as many assumed. Instead, it has followed a wave-like pattern, with its share now nearly back to its 2000 level. This means the dollar remains the dominant currency for global borrowing, despite the rise of the euro and the Chinese renminbi.

For years, many economists and policymakers expected the dollar's dominance to fade as other major currencies gained traction. This paper shows that the dollar's role in global debt markets is more resilient than expected. It suggests that the structural advantages of the dollar, like the depth of US financial markets, continue to outweigh challenges from other currencies.