Research Article
The World's Key Reserve Currency: Challenges and Threats - BRICS Is Close to Create Its Own Currency
Andriy Zhylinskyi*
Issue:
Volume 13, Issue 5, October 2025
Pages:
214-231
Received:
23 January 2025
Accepted:
10 February 2025
Published:
14 October 2025
DOI:
10.11648/j.jfa.20251305.11
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Abstract: The object of the research is to deepen the scientific understanding of reserve currencies in a historical and modern context. This study examines the evolution of the global reserve currency system, with a particular focus on the dominance of the U.S. dollar and the growing roles of the euro, Chinese yuan, Japanese yen, and British pound over the past two decades. The investigated problem lies in the transformation of the essence and function of reserve currencies over the last 25 years, driven by structural shifts in the global economy, financial markets, and geopolitical dynamics. Previously unresolved aspects of this broader issue include the increasing challenges to the U.S. dollar's status as the sole global anchor currency, especially from emerging powers such as BRICS. The analysis of recent research and publications highlights a wide range of scholarly and institutional perspectives, including works by Bertaut, Gopinath, Eichengreen, Rogoff, Bracke, and Bunda, along with research conducted by the IMF, Federal Reserve, World Bank, ECB, and BIS. These sources provide the basis for a deeper examination of monetary anchoring and global exchange rate behavior. The main scientific results include an updated application of the Frankel and Wei (2008) methodology to assess currency anchoring patterns in 149 emerging and developing countries during 2010–2024. The study also presents forecasts based on purchasing power parity, indicating the increasing economic weight of BRICS in global GDP. The area of practical application involves policy planning by governments that continue to rely on the U.S. dollar as an anchor currency. Innovative technological approaches identified include enhanced prudential oversight by central banks and the development of adaptive exchange rate policies in response to growing financial risks. The scope of these innovations also includes strategies to redirect European savings into high-tech sectors that stimulate sustainable growth and reduce systemic dependence on the dollar. This research contributes to the global discourse on the transition toward a more multipolar reserve currency system and offers insights into how monetary sovereignty and stability can be maintained in a changing world economy.
Abstract: The object of the research is to deepen the scientific understanding of reserve currencies in a historical and modern context. This study examines the evolution of the global reserve currency system, with a particular focus on the dominance of the U.S. dollar and the growing roles of the euro, Chinese yuan, Japanese yen, and British pound over the ...
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Research Article
War Discourse and Financial Markets: Some Concerns
Avanidhar Subrahmanyam*
Issue:
Volume 13, Issue 5, October 2025
Pages:
232-235
Received:
21 September 2025
Accepted:
16 October 2025
Published:
27 October 2025
DOI:
10.11648/j.jfa.20251305.12
Downloads:
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Abstract: One of the key issues in finance is whether sentiment is related to stock prices. Sentiment can influence prices via its effect on investors’ moods. A recent innovation in this space has been to perform text analysis on newspaper articles. A recent technique that is applied for this purpose is supervised Latent Dirichlet Allocation (sLDA), which allows articles to be scored based on topics such as War, Conflict, Financial Crisis, and so on. This work clarifies some issues surrounding two research papers published and forthcoming on the subject of whether war discourse in the New York Times predicts returns. One paper indicates that war discourse positively predicts next-month ahead market returns. The rationale is that the sentiment surrounding war discourse suppresses current prices and thus increases future expected returns. The second paper argues that loadings (betas) on the war factor command negative premia in the cross-section of stock returns. The rationale is that people require lower returns on stocks that form a hedge against the war factor. In this paper, I take a deeper look at the papers’ findings. I argue that authors are making judgment calls that need to be discussed and disclosed, and that the results are not robust.
Abstract: One of the key issues in finance is whether sentiment is related to stock prices. Sentiment can influence prices via its effect on investors’ moods. A recent innovation in this space has been to perform text analysis on newspaper articles. A recent technique that is applied for this purpose is supervised Latent Dirichlet Allocation (sLDA), which al...
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