25 Jun

No alternative to the US dollar

The US dollar remains unchallenged as the world's reserve currency and is the reason the US's credit rating has remained static.

Moody's Investors Service has not changed their AAA credit rating given to the United States because the dollar remains unchallenged as the world's reserve currency. The credit rating stands besides the fact that the nation's budget deficit is set to quadruple this year. The financial health of the world's largest economy has been scrutinised by its creditors as bailouts and stimulus plans bulk up the budget deficit forecasted to land at a record USD1.85 trillion this year.

The US's debt to gross domestic product is estimated to increase nearly 20% up from an already high 40.8%. Even if the ratio were to exceed 100%, the rating would hold as long as borrowing costs stay low. The US has decided to keep interest rates low because the debt issued is in its own currency, and the currency just so happens to be the international reserve currency.

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