Why the Dollar Rules the World—and Why That May Be Changing

After World War II, many countries began using the dollar for international trade. This became even more common with the petrodollar system, where oil is mostly bought and sold in dollars. Over time, countries also stored large amounts of dollars in their reserves. This gave the USA great economic influence because so much of the world depends on its currency.

But things may be starting to change.
In recent years, countries have been exploring ways to rely less on the dollar—a trend called de-dollarisation. Groups like BRICS (Brazil, Russia, India, China and South Africa) have discussed trading more in their own currencies and reducing dependence on the dollar.

Many central banks are also buying more gold. Gold does not belong to any one country, so it cannot be controlled in the same way as foreign currency reserves. Some countries worry that political disagreements could lead to sanctions or frozen accounts. In the past, the US has used its dollar power to block access to reserves or financial systems of countries such as Russia and Venezuela. Holding more gold is one way for countries to reduce this risk.

For India, these changes matter greatly. India imports large amounts of oil, usually paid for in dollars. When the dollar becomes stronger and the rupee weakens, imports become costlier. Because global GDP rankings are also measured in dollars, a weaker rupee can also make India’s economy look smaller on paper.

If India can trade more in rupees or other currencies, it may reduce some of this pressure. The dollar still leads today—but the global money system may slowly be evolving.