US Dollar: Whenever people talk about the strength of a currency, age is often considered an advantage. By this logic, the US dollar should never have been on top. In fact, many currencies are much older than the dollar, but despite this the US dollar dominates global trade, reserves and finance. Let us know what is the reason behind this.

Old currency from US dollar

The US dollar officially came into existence between 1785 and 1792. Long before that, many places had already developed a stable monetary system. The British pound, first used in Anglo-Saxon England in 775 AD, is the world’s oldest currency still in use. It is about 1000 years older than the dollar. With this, the Indian rupee was formally standardized in the 16th century during the reign of Sher Shah Suri. But its roots extend back to ancient silver coins of the sixth century BC.

Similarly, the Serbian dinar, introduced in 1214, and the Russian ruble, which dates back to the 13th century, have survived political changes over the centuries. Even the Swiss franc, which was officially adopted nationwide in 1850, existed in different forms in Swiss cantons long before the US dollar became globally relevant.

If these currencies are old then why haven’t they become dominant

Age alone does not guarantee dominance. Most of these currencies were linked to regional empires or local trade systems. Their influence waxed and waned with the power of the states that issued them. When those empires weakened, their currencies lost global appeal.

Turning Point of Bretton Woods

The biggest moment for the US dollar came with the Britain Woods Agreement in 1944. 44 countries agreed on a global financial system. In this, the major currency was linked to the US dollar and the dollar itself was backed by gold at a fixed rate. It immediately became the anchor of the USD global monetary system.

After the Second World War, large parts of Europe and Asia were destroyed. Whereas the United States emerged as economically powerful, industrially advanced and economically stable. At that time America had about two-thirds of the world’s gold reserves. This was the only reason why the dollar was considered the safest source of value.

advantage of petrodollar

In the 1970s, America made a strategic deal with Saudi Arabia and other OPEC countries. According to this deal, oil will be traded only in US dollars. This petrodollar system forced every oil importing country to hold dollars. Due to which the global demand for US dollars increased forever.

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During the Second World War, the United States supplied weapons, food and goods to the allied countries. Most of the payments were made in gold. Because of which America was able to accumulate about two-thirds of the world’s gold reserves by the end of the war.

America has arrested Venezuelan President Nicolas Maduro. Because of this there is panic at the global level. However, in the meantime we will tell how America has not only put pressure on Venezuela at the political level, but their currency also has a lot of influence in Venezuela.
The official currency of Venezuela is Bolivar Soberano, which is internationally recognized by the code VES. This currency has been facing serious economic crisis and uncontrolled inflation for a long time. The situation became so bad that the government had to repeatedly remove zeros from the notes.

Bolivar price ends

Rising inflation in Venezuela almost destroyed the value of the bolivar. In the year 2008, then in 2018 and then in 2021, the government made several changes in the prices of notes as part of currency reform. Despite this, the currency’s decline did not stop. This had a direct impact on the common people and everyday things also became very expensive.

Dollar became the choice of common people

Due to the weakness of the Bolivar, the use of the US dollar increased rapidly in Venezuela. Today the situation is such that the prices of most goods and services in the market are fixed in dollars. Although payment can also be made in bolivar, people consider dollars more reliable. Gradually the dollar is being used as a parallel currency in Venezuela.

Why is the dollar stronger?

The US dollar is counted among the most stable and strong currencies in the world. Due to political and economic instability in Venezuela, people have lost confidence in their currency. In such a situation, dollar has become the safest means of savings and transactions. According to Wise.com, the value of one US dollar in Venezuela is approximately equal to 304.30 Bolivar Soberano. This figure clearly shows how strong the dollar is compared to the bolivar. According to this, if an American takes 1 thousand dollars to Venezuela, then its value there will be 3 lakh 4 thousand bolivars.

real picture of economic crisis

Despite being among the countries with the world’s largest oil reserves, Venezuela’s economy remains weak. Inflation, currency devaluation and foreign sanctions have made the situation worse. Until economic stability returns, the future of the Bolivar may remain challenging.

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