US is still consumer of last resort – generates demand for dollars – keeps US power high.
Miguel Otero Iglesias 23, Senior Analyst at the Elcano Royal Institute and Professor at IE School of Global and Public Affairs, 5-30-23, Elcano Royal Institute, "Is US dollar hegemony under threat?," https://www.realinstitutoelcano.org/en/analyses/is-us-dollar-hegemony-under-threat/ //AS
Nonetheless, structurally speaking, the core of US monetary power, and by extension the lack of China’s capacity to challenge it, lies in its ability (and willingness) to run large balance of payment deficits to supply the world with its currency. The US remains the consumer of last resort of the world economy, with a current account deficit of US$943.8 billion (or 3.7% of GDP) in 2022, and the fact is that the world is ready to provide it with the necessary credit (and thus generate a large demand for dollars) to continue to perform this role –at least for now–. This would, of course, change if the political deadlock in the US Congress should prevent lifting the debt ceiling and the US were to enter into default. Conclusions What next?
To sum up, the dollar remains dominant, but there are many powers that want to move away from it. Nonetheless, the truth is that all the alternative arrangements are still much smaller in scale and scope than the dollar network. The BRICS called many times to de-dollarise, but the dollar remains the currency of choice for governments, firms and financial institutions around the world to conduct trade and investment. The RMB, the currency with most potential to rival the greenback, is still not very important in its international use and it could take a while before it reaches the dollar, or even the euro, as an international currency, if at all. So, as Susan Strange would put it, we are again discussing the persistent myth of lost US dollar hegemony.