The U.S. dollar remains the world’s leading reserve currency, but recent developments — particularly President Donald Trump’s unilateral economic diplomacy, including weaponization of the dollar — have fueled doubts about whether it will maintain that status. While some of America’s geopolitical rivals may hope to displace the dollar, the real challenge facing Asian economies is to manage the vulnerabilities created by their heavy dependence on it.
To be sure, no other currency currently rivals the dollar’s credibility and global reach. While geopolitical tensions and the risk of sanctions have fueled diversification efforts, the greenback’s international dominance is unlikely to diminish in the near term.
That is not necessarily good news for ASEAN+3 countries, because their longstanding reliance on the dollar makes them acutely exposed to U.S. monetary-policy shifts and global financial shocks. Asian policymakers must therefore focus on bolstering financial resilience through deeper regional cooperation — not necessarily a euro-style monetary union, but rather pragmatic measures aimed at reducing risks and enhancing strategic autonomy.
