Dollar dominance in global finance and geopolitics | UPSC GS

Core Argument
• The real geopolitical problem is not oil availability but dollar dominance in global finance.
• Monetary power is central to geopolitics.
• The dollar-based settlement system gives the U.S. disproportionate influence.

International Liquidity Problem
The problem of international liquidity is related to the non-availability of:
(a) goods and services
(b) gold and silver
(c) dollars and other hard currencies
(d) exportable surplus

Key Data Points

Venezuela
• ~17% of world’s proven oil reserves

US Dollar (global)
• ~88% of global foreign-exchange transactions use the dollar
• ~58% of global foreign-exchange reserves are dollar-denominated

India
• Imports ~85% of crude oil
• ~90% of India’s trade invoiced in dollars
• 55–60% of India’s forex reserves held in dollars

Ans – C
Ans – D
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Dollar dominance in global finance and geopolitics | UPSC GS

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