Recently, however, Russia has announced it will accept only rubbles as payment for its oil.

There is also a rumor that Saudi Arabia and China are discussing the use of yuan, for payments of its oil. Should answer the following questions:

1. Define reserve currency and its role.

2. What are the pros and cons of a country having its currency as the reserve currency.

3. Is there a possibility of the dollar being replaced?

4. If it were replaced would the change impact the current international trade payment system?

5. Again, if the U.S. dollar is replaced, how would it affect the U.S. economy?

Answer rating: 100% (QA)

1 A reserve currency is a currency that is held in significant quantities by governments and institu... View the full answer