[spiralx]

Being the main reserve currency (global reserves are ~60% USD, ~30% Euro and 9% GBP/JPY/CAD) also means local financial crises lead to dollar buying which then affects the price of USD and thus US imports and exports. This is in part why the US has had a policy of discouraging the USD's status as the sole reserve currency - global reserves used to be 80% or more USD.

[kelseyfrog]

Interesting! Would it be fair to say that on one hand the US is incentivized to have the US dollar maintain its role as the main reserve currency because it enables access to lower lending rates, but on the other hand too much dollar dominance exposes the US to greater risk?

[spiralx]

No, the US gets low rates because of the stability and strength of its economy i.e. both reserve currency use and low interest rates are effects, not causes.

https://www.brookings.edu/blog/ben-bernanke/2016/01/07/the-d...