Is dollar good for Kenya economy?

Central banks in both developed and developing countries have been rebalancing their reserves portfolios by increasing the percentage held in euros, yen, Australian dollars and gold.

This rebalancing has so far has been confined to incremental reserves in the countries that have current account surpluses.

Many of them have not found it necessary to sell large quantities of US dollars.

In recent months there has been talk of an alternative to the US dollar as the world’s reserve currency, but there is no viable alternative at this stage apart from the euro, which is rising inexorably, but it has other problems.

It is expected that at some point in this long and bumpy decline of the US dollar, it will start to put upward pressure on US bond yields, which would quickly put the US economy and share market into reverse.

It will be a long time before America’s share market is robust enough to withstand significant increases in mortgage rates, so the trick that the US has to pull off is depreciating the currency to help manufacturers and export industries, and therefore jobs.