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A couple of recent geopolitical events have prompted the hoary old question of whether the dollar’s hegemony as the world’s reserve currency is at risk. It isn’t. Not in the slightest. If anything, the developments just serve to underline why King Dollar sits atop the throne.
The most recent challenger is a putative South American common currency, with the working title of the sur (south). It’s an idea that’s been kicking about since the 1980s, but my colleague Eduardo Porter believes it is either dangerous or irrelevant. If it ever comes to pass, it would be used to facilitate trade between Brazil and Argentina (though they’d retain their respective currencies). Other South American countries could be tempted to join if it succeeded in smoothing the bumps of illiquid, volatile local currencies. But there is something that does that already — it’s called the US dollar.