Comments on: "The dollar is the world's reserve currency": What the heck does that mean? http://www.myylt.com/2009/01/13/the-dollar-is-the-worlds-reserve-currency-what-the-heck-does-that-mean/ Discussion of Forex Trading and Currency Trading Tue, 22 May 2012 05:52:38 +0000 http://wordpress.org/?v=2.3.3 By: Mr Economist http://www.myylt.com/2009/01/13/the-dollar-is-the-worlds-reserve-currency-what-the-heck-does-that-mean/#comment-11095 Mr Economist Tue, 30 Nov 1999 00:00:00 +0000 http://www.myylt.com/2009/01/13/the-dollar-is-the-worlds-reserve-currency-what-the-heck-does-that-mean/#comment-11095 A bank is meant to hold a fraction of its money in reserves, which means that it cannot lend out or use this money and is in reserves for emergency. The central bank indicates what percentage of money should be put into reserves. This reserve money is in dollars, so if the value of the dollar declines sharply, so do the world's reserves of money, which is why the dollar is such an important currency. A bank is meant to hold a fraction of its money in reserves, which means that it cannot lend out or use this money and is in reserves for emergency. The central bank indicates what percentage of money should be put into reserves. This reserve money is in dollars, so if the value of the dollar declines sharply, so do the world's reserves of money, which is why the dollar is such an important currency.

]]> By: nothingconstant http://www.myylt.com/2009/01/13/the-dollar-is-the-worlds-reserve-currency-what-the-heck-does-that-mean/#comment-11096 nothingconstant Tue, 30 Nov 1999 00:00:00 +0000 http://www.myylt.com/2009/01/13/the-dollar-is-the-worlds-reserve-currency-what-the-heck-does-that-mean/#comment-11096 It means that many nations use the dollar as a peg for their currencies or denominate products in dollars. OPEC prices oil in dollars for example. They also peg their currencies to the dollar. They buy and sell dollars to regulate their monetary supply. It means that many nations use the dollar as a peg for their currencies or denominate products in dollars.

OPEC prices oil in dollars for example.

They also peg their currencies to the dollar. They buy and sell dollars to regulate their monetary supply.

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