This has had important consequences, but has not meant a shift to a genuine duopoly in the supply of international currencies. While the euro has become a credible alternative to the dollar, this has had little impact on the dollar’s centrality in the IMS. In particular, the exorbitant privilege remains largely the dollar’s attribute.
To be sure, it is undeniable that the very low yield spreads associated, until approximately 2008, with the debt of certain European countries were mainly a by-product of the “privilege” of being part of the euro area.