Strong dollar weighing on trade, says BIS

Advanced-economy monetary policy may have made the problem worse

US dollar

The strength of the US dollar appears to be a factor in the recent weak performance of global trade and manufacturing, according to Hyun Song Shin, the Bank for International Settlements’ head of research.

In a speech on May 14, Shin said that as the global trade financing currency, the dollar’s strength creates tighter trade-financing conditions. A study by the Committee on the Global Financial System found 80% of bank trade financing was in dollars.

The relationship is borne out in the data,

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