Uncertain future of petrodollar: Will it have any impact on the Nepali economy?
Photo by Kenny Eliason on Unsplash A word known as petrodollar has been used to denote the US dollar’s hegemonic status in global oil trading. Since the United States and Saudi Arabia struck a deal that designated the dollar as the currency for oil transactions, the term petrodollar gained existence in the 1970s. Countries that wanted to buy oil from the Organization of the Petroleum Exporting Countries (OPEC) were required to do so using US dollars under this arrangement, sometimes known as the petrodollar system. The need for countries to hold dollars in order to buy oil resulted in a persistent demand for dollars in the global economy. The system which has aided in keeping the dollar’s position as the world’s reserve currency has had a considerable impact on the world economy. The mechanism has also provided the US with some sway over OPEC nations, enabling the US to pressure OPEC through its control over the dollar flow. However, the petrodollar system has recently faced s...