A strong, competitive economy, open to, and active in, international trade and finance will naturally generate a large quantity of foreign exchange transactions with at least one leg in the home economy to support its wide-ranging business activity. Another factor underlying the international use of a currency is the presence of an open, welldeveloped financial system.
This factor is a necessary part of a strong, competitive, and open economy. Just as relatively low levels of inflation and inflation variability contribute to the international demand for a currency, well-developed financial markets supply assets appropriate for international use, and strengthen the demand for additional assets as well.