US dollar's reserve currency status to persist: Morgan Stanley

Recent events, such as the ongoing rivalry with China, Russia's military actions in Ukraine, US debt ceiling debates, and rising debt levels, have raised questions about the dollar's status.

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While some countries may seek alternatives to the dollar due to concerns about the fiscal outlook and Washington's use of economic sanctions.

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The report highlights that even small changes in percentage terms can lead to significant nominal changes due to the large size of global currency reserves and trade volumes.

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Despite short-term strength for the dollar, driven by factors like sticky inflation and geopolitical tensions, the report expects only a moderate and gradual decline in the dollar's international use.

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