FACT CHECK: US dollar remains global reserve currency

The Claim: The Chinese yuan has replaced the US dollar as the global currency reserve. The video cited Kenya’s decision to buy oil using Kenyan shillings instead of dollars and the Brazil-China agreement to abandon the dollar on its trades as evidence of the currency’s diminution.

Rating: FALSE

Why we fact-checked this: The YouTube video, posted on April 9, has gained 43,558 views and 3,000 likes from a channel with 192,000 subscribers.

Still dominant: The Wall Street Journal said in an article that the US dollar remains as the world reserve currency despite its foreign exchange shares dropping below 59%. The report said the yuan’s wider use is still limited by China’s strict capital control over the currency, barring its usage outside of trades with China.

British broker Capital.com also suggested that the US dollar index can continue to rise up to 119.193 in 2025. As of writing, there are no reports that indicate the US dollar has been replaced by any currency as the international reserve currency.

What is a reserve currency? According to the US Congress Research Service report, the world’s reserve currency is the legal tender used the most by central banks to conduct international trade and financial transactions with other nations. The article says that the US dollar has been the dominant reserve currency since World War II.

Dollar replacement: Countries mentioned in the video containing the claim did replace the dollar, but their move was driven by their current financial and political situations.

According to recent Bloomberg data, the Chinese yuan replaced the US dollar as the most traded currency in Russia only after US-led financial sanctions restricted foreign trades with the country because of its attack on Ukraine last February 2022. The sanctions caused the Russian finance ministry to convert market operations to yuan, one of the few currencies that still allow cross-border transactions with Russia, an Al Jazeera report said.

Turkish news company Anadolu Agency reported that Kenya’s shift from the US dollar to shillings for oil purchases is a response to an ongoing fuel crisis due to a dollar shortage in the country. The report detailed that the move was made to “ensure dollar availability” in the coming weeks.

Brazil did make an agreement with China to replace the US dollar on its transactions, but only as an intermediary currency on international trades between the two nations. Reports from China’s Yicia Global further suggested that the agreement did not fully discard the dollar for trades, but only added a local settlement currency channel for cross-border exchanges. Brazil continues to use the US dollar for its other international trades.

Claims about the dollar’s devaluation became more common after the dollar’s value rose to combat inflation in the US. Rappler had previously fact checked reports on dollar removal by the gold standard. Kyle Marcelino/Rappler.com

Kyle Marcelino is a graduate of Rappler’s fact-checking mentorship program. This fact check was reviewed by a member of Rappler’s research team and a senior editor. Learn more about Rappler’s fact-checking mentorship program here.

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