{
  "title": "Dominant Currencies and External Adjustment",
  "publication": "Staff Discussion Notes, July 20, 2020",
  "sourceUrl": "https://www.imf.org/en/publications/staff-discussion-notes/issues/2020/07/16/dominant-currencies-and-external-adjustment-48618",
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  "summary": "The extensive use of the US dollar when firms set prices for international trade (dubbed dominant currency pricing) and in their funding (dominant currency financing) has come to the forefront of policy debate, raising questions about how exchange rates work and the benefits of exchange rate flexibi",
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    {
      "heading": "Summary",
      "content": "- Title: Dominant Currencies and External Adjustment\n- Authors: Gustavo Adler, Camila Casas, Luis M. Cubeddu, Gita Gopinath, Nan Li, Sergii Meleshchuk, Damien Puy, Yannick Timmer\n- Date: July 20, 2020\n- Abstract: Documents extensive use of the US dollar in trade pricing (dominant currency pricing) and in funding (dominant currency financing) and explores implications for how exchange rates can help external rebalancing and buffer macroeconomic shocks.\n- Series: Staff Discussion Notes No. 2020/005\n- Issue: 005"
    },
    {
      "heading": "Major findings and themes",
      "content": "- Dominant currency pricing: The US dollar is extensively used when firms set prices for international trade, affecting how exchange rates transmit to trade prices and volumes.\n- Dominant currency financing: Firms’ use of the US dollar in funding raises questions about currency mismatches and their macroeconomic implications.\n- External adjustment and exchange rate flexibility: The interaction of dominant currency pricing and financing alters the traditional channels through which exchange rate movements support external rebalancing and absorb shocks."
    },
    {
      "heading": "Policy implications and analysis directions",
      "content": "- Reassess benefits of exchange rate flexibility in environments with dominant currency pricing and financing.\n- Consider implications for macroeconomic policy and external rebalancing when invoicing and funding are concentrated in a dominant currency.\n\n---\n\n Content in this bundle\n\n- Staff Discussion Note\n  - Staff Discussion Note (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Staff Discussion Note (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/staff-discussion-notes/issues/2020/07/16/dominant-currencies-and-external-adjustment-48618"
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    "Authors: Gustavo Adler, Camila Casas, Luis M. Cubeddu, Gita Gopinath, Nan Li, Sergii Meleshchuk, Damien Puy, Yannick Timmer",
    "Published: July 20, 2020",
    "Series: Staff Discussion Notes",
    "DOI: https://doi.org/10.5089/9781513512150.006",
    "Title: Dominant Currencies and External Adjustment",
    "Authors: Gustavo Adler, Camila Casas, Luis M. Cubeddu, Gita Gopinath, Nan Li, Sergii Meleshchuk, Damien Puy, Yannick Timmer",
    "Date: July 20, 2020",
    "Abstract: Documents extensive use of the US dollar in trade pricing (dominant currency pricing) and in funding (dominant currency financing) and explores implications for how exchange rates can help external rebalancing and buffer macroeconomic shocks.",
    "Series: Staff Discussion Notes No. 2020/005",
    "Issue: 005",
    "Dominant currency pricing: The US dollar is extensively used when firms set prices for international trade, affecting how exchange rates transmit to trade prices and volumes.",
    "Dominant currency financing: Firms’ use of the US dollar in funding raises questions about currency mismatches and their macroeconomic implications.",
    "External adjustment and exchange rate flexibility: The interaction of dominant currency pricing and financing alters the traditional channels through which exchange rate movements support external rebalancing and absorb shocks.",
    "Reassess benefits of exchange rate flexibility in environments with dominant currency pricing and financing.",
    "Consider implications for macroeconomic policy and external rebalancing when invoicing and funding are concentrated in a dominant currency.",
    "**Staff Discussion Note**"
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