Dollarization Waves: New Evidence From a Comprehensive International Bond Database

We investigate the evolution of the U.S. dollar’s prominence in the denomination of international debt securities using a comprehensive global dataset with far more extensive coverage than datasets used in prior literature. We find no monotonic dollarization or de-dollarization trend; instead, the dollar’s share exhibits a wavelike pattern. We document three dollarization waves since the 1960s. The last wave, following the global financial crisis, lifted the dollar’s share nearly back to its level in 2000. We show that closer alignment of a country’s currency to a reserve currency correlates with higher shares of issuance in that reserve currency.