Written By Hanny & Melissa on Sunday, April 23, 2017 | Sunday, April 23, 2017

Looking at the currency rates both on the internet and newspapers, we can see almost all the currencies in the world exchange rate United States (US) dollar.

Why should be like that ...?.

Because the true United States Dollar is currently an international currency. Even information says all the countries that exist in the world save its foreign exchange reserves in the form of dollars.

So that's not surprising almost everyone in the world want to accept dollars, meaning dollar is believed as a means of payment around the world.

To note, although the universe is not only the United States that use the dollar, but only the money that became the international currency. And not singapore dollars, Australian dollars or other dollars.

US Dollar (United States Dollar) is the official currency for the United States, then for the issuance of dollar money uncle sam country is controlled by the Federal Reserve banking system, then the code of ISO 4217 for the US dollar is USD, while the title in the article International Monetary Fund Is US $.

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Furthermore, why the US Dollar could become an international currency ...?.

The answer, because in the old days printing money can not be done carelessly, there must be a gold reserve, simple story means a proof of ownership of gold.

So on then be made in the form of paper caused due to physical gold if it is intended to buy and purchase transactions are too heavy and hassle.

At the end of the second world war, the countries of Europe and the world suffered economic collapse, these poor and even poor countries were powerless to rebuild their country.

So looking at such a middle condition, Uncle Sam's non-impoverished country decides to help in the form of giving debt or loans, the loan is in the form of dollar currency.

Then as a guarantee, the countries that want to indebted must hand over gold to the United States. That way America almost dominates the gold all over the world, then be the gold-assisted dollar as well as believed to be the currency.

As a result of serving the whole world, as the time develops Americans have to print dollars in large quantities and distribute it spread abroad.

Countries that used to borrow money have been able to build and restore the country, and even can print their own currency.

However, even though they have printed themselves, they still believe in the US dollar, including even the largest foreign exchange reserves of each country in the form of dollars, from that US dollar into an international currency that is used all over the world.

The next reason why the US dollar currency dominates, of course because of its economic strength. Formerly the appraisal base was about how much gold inventory, but now it has been different.

The greater the level of Gross Domestic Product (GDP) of a country and the volume of cross-border transactions, the greater the level of demand for its currency.

It can not be denied that until 2017, the United States is still the country with the largest total GDP and its growth is highly consumer-driven.

In addition, USA also has a variety of giant industry of international scale. Currency exchange rates have been left entirely on the market mechanism, without any direct intervention from the government.

Furthermore, the military power both in terms of weaponry, personnel, and intelligence of the United States is difficult to find counterfeit.

Throughout the history of mankind, especially in the era of colonialism and wartime, a series of events in which a currency will be strengthened and accompanied by dominant military forces is not just one or two course.

In the Military Strength Index report in September 2015, the US occupies the first position , Followed by Russia, China, Japan, and India in the top five (Indonesia itself is ranked 19). It can be said that a tough country in the military is not the US alone.

However, the currencies of these countries still do not necessarily meet other requirements as well as the USD currency, therefore their country's currency also clearly can not occupy the rank of one.

Then the strongest reason why the US dollar became the world currency, because Prestige Diplomacy Abroad. Where each country is likely to conduct trade transactions and financial transactions with other countries that have good relations.

This is because diplomacy prestige is not about how much the country is afraid of, but rather how well the ability of the diplomatic team to expand the network, lobby, and make friendships.

This means that in this context, it can be understood how the United States, which is involved in dozens of trade agreements and alliances across countries, can make USD the world currency.

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Risk of Being an International Currency.

In the present day many currencies are not printed with the support of gold reserves or so-called fiat money. Dollar has already printed a lot and spread all over the world, although many people say it is actually beneficial for America, but there are things that become the responsibility of US as the owner of dollars, international currency.

The responsibility is that the United States must maintain world confidence in the dollar. This is a pretty heavy task. If the trust is lost, automatically Americans with their dollar will drop abruptly.

But I am sure all countries do not want this, because their foreign exchange reserves are dollars. If the dollar is no longer trusted, it will also impact on them, and will be more difficult in controlling its liquidity.

Requirements to Be a World Currency.

Being an international currency is required to have a lot of money because it will be used internationally. Then on the next point should also be able to maintain the world's trust in the money.

By weighing this requirement, surely the owner of international currency must be a strong country. Not only strong economic but also strongly the political security of the country.

This can be exemplified as the currency of the Iraqi state dinar. Although the currency is quite strong, but the state is unstable because of the war.

And once the country is automatically destroyed the country will be poor, then its currency will fall and weaken. So anyone who keeps the foreign currency, especially in the long run will definitely think about this.

They do not want to lose, for that chosen US Dollar which became the international currency because the United States is predicted to be stable in the long term.

And that's the reason for the US dollar to be the world currency or international currency.

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