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Reserve currencies
More than a third of UK imports over the past decade were invoiced in dollars , but only 10 % of these actually came from the US
uses a different currency to you , it makes sense to use the currency that most other people use , even if that ’ s not your own , because it ’ s usually cheaper .” For example , more than a third of UK imports over the past decade were invoiced in dollars , but only 10 % of these actually came from the US . “ In many Asian economies , more than 80 % of exports are billed in dollars . It ’ s also usually cheaper to get financing arrangements when you invoice in the world ’ s reserve currency , particularly for companies in emerging markets ,” Smith adds . It will come as a surprise to no one that the dollar has been the most widely used global currency for decades . What is interesting is what has happened just below the top spot – data from the Bank for International Settlements shows that since 1992 , the order of currencies has stayed more or less the same , with the euro ( and the Deutschmark before 2000 ) in second place , the yen in third and sterling in fourth .
Stealing a march The elephant in the room is China . The renminbi began 1998 in 40th place , rose to 25th by 2004 , then eighth in 2016 and sits fifth today .
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