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The dollar began gradually, replacing the sterling as the new reserve currency. Not until the late 1950’s did the dollar have complete control, before then Central Banks still held a majority of their reserves in sterling. This later changed with the continuous economic growth in the US. The US (was) attractive because it seem(ed) secure. (James2008); reason being; only the US had liquid financial markets, it was free of capital controls, and there were no other alternatives to the dollar.
Over the years, the dollar had its fair share of economic decline especially during the war in the 1970’s...
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