'Don't see any major changes': Gita Gopinath explains why US Dollar’s dominance isn’t fading anytime soon
The debate around the greenback’s future is not new. Investors have long worried about America’s ballooning debt, trade tariffs, and more recently, the pandemic’s fiscal fallout. Yet, as Gopinath pointed out, a currency’s importance depends far less on trade volume than many assume.
- Sep 13, 2025,
- Updated Sep 13, 2025 9:32 PM IST
Former IMF Chief Economist and Deputy Managing Director Gita Gopinath, now a Harvard Professor, believes the US dollar’s global dominance is unlikely to shift in the foreseeable future. Speaking on an IMF podcast, Gopinath said she remains deeply interested in the subject, especially in the “asymmetry and power” the dollar wields worldwide.
Addressing the million-dollar question of whether the dollar’s supremacy could fade, she remarked, “As of now, I don’t see major changes.”
Gopinath explained that the currency’s strength lies not only in the size of the US economy but also in the “strength of its institutions, the depth and liquidity of its financial markets, and the law and order in the country.” These fundamentals, she said, are what have cemented the dollar’s dominance — and will likely sustain it for years to come.
The debate around the greenback’s future is not new. Investors have long worried about America’s ballooning debt, trade tariffs, and more recently, the pandemic’s fiscal fallout. Yet, as Gopinath pointed out, a currency’s importance depends far less on trade volume than many assume.
While the US dollar is the world’s leading reserve currency, it is not the only one. Others — such as the Euro, Pound Sterling, Yen, Swiss Franc, Australian and Canadian dollars, and China’s Renminbi — also play important roles. Historically, the Deutsche Mark held prominence before being absorbed into the Euro.
For every day consumers, a stronger dollar has tangible effects. It means emerging market currencies like the Indian rupee must stretch further to buy the same dollar-priced goods. For example, if an iPhone costs $1,000, a rising dollar means Indians must spend more rupees for the same product. Finance Minister Nirmala Sitharaman had once clarified that this does not mean the rupee is “weakening,” but rather that the dollar is “strengthening.”
That strength carries consequences. From pricier petrol and imported electronics to inflationary pressures, a surging dollar affects households and economies in developing nations, including India. Which is why, despite its global advantages, the dollar’s appreciation often sparks concern closer to home.
Former IMF Chief Economist and Deputy Managing Director Gita Gopinath, now a Harvard Professor, believes the US dollar’s global dominance is unlikely to shift in the foreseeable future. Speaking on an IMF podcast, Gopinath said she remains deeply interested in the subject, especially in the “asymmetry and power” the dollar wields worldwide.
Addressing the million-dollar question of whether the dollar’s supremacy could fade, she remarked, “As of now, I don’t see major changes.”
Gopinath explained that the currency’s strength lies not only in the size of the US economy but also in the “strength of its institutions, the depth and liquidity of its financial markets, and the law and order in the country.” These fundamentals, she said, are what have cemented the dollar’s dominance — and will likely sustain it for years to come.
The debate around the greenback’s future is not new. Investors have long worried about America’s ballooning debt, trade tariffs, and more recently, the pandemic’s fiscal fallout. Yet, as Gopinath pointed out, a currency’s importance depends far less on trade volume than many assume.
While the US dollar is the world’s leading reserve currency, it is not the only one. Others — such as the Euro, Pound Sterling, Yen, Swiss Franc, Australian and Canadian dollars, and China’s Renminbi — also play important roles. Historically, the Deutsche Mark held prominence before being absorbed into the Euro.
For every day consumers, a stronger dollar has tangible effects. It means emerging market currencies like the Indian rupee must stretch further to buy the same dollar-priced goods. For example, if an iPhone costs $1,000, a rising dollar means Indians must spend more rupees for the same product. Finance Minister Nirmala Sitharaman had once clarified that this does not mean the rupee is “weakening,” but rather that the dollar is “strengthening.”
That strength carries consequences. From pricier petrol and imported electronics to inflationary pressures, a surging dollar affects households and economies in developing nations, including India. Which is why, despite its global advantages, the dollar’s appreciation often sparks concern closer to home.