Long-established market forces have cemented the United States dollar’s position as the undisputed global standard of value, and recent fluctuations in other major currencies will bring no meaningful economic shifts to Caribbean nations, according to a prominent former central banking leader from the region.
Dr Delisle Worrell, former governor of the Central Bank of Barbados and a veteran International Monetary Fund consultant, laid out this argument in the May issue of his regularly published Economic Letter, which carries the headline *The Dollar is the World’s Standard of Value*.
Worrell stressed that Caribbean economies are structured entirely around the US dollar for cross-border activity. Every key external transaction for the region—from pricing tourist packages to settling export and import trades, to securing foreign debt—uses the US dollar as the benchmark, and all clearing processes run through dollar-denominated accounts hosted by American commercial banks and the Federal Reserve Bank of New York. Against this backdrop, recent upward movements in the value of sterling, the Canadian dollar, the euro, the Japanese yen and the Chinese renminbi will not alter core economic conditions for Caribbean countries, he said.
The former governor, who also founded the Central Bank of Barbados’ research department, pointed out that the primary spillover harm from today’s global economic instability hitting Caribbean nations is imported inflation. He outlined a clear threshold for policy response: only countries where governments hold a fiscal surplus of revenue over current expenditure exceeding 2% of GDP have the capacity to roll out targeted subsidies to cap fuel and essential goods prices. For all other regional economies, there are few policy tools available to ease inflationary pressure, he added.
Worrell also issued a strong caution against one commonly proposed policy adjustment: revaluing domestic currencies to counteract inflation brought in from global markets. He explained that if a central bank drew down its foreign currency reserves to push the domestic exchange rate higher, market participants including commercial banks, import and export firms, and tourism operators would almost certainly hoard the cheapened US dollars instead of passing the exchange rate benefits through to consumers and other end users.
Global monetary data backs his broader claim about the dollar’s dominance: out of 180 legally recognized sovereign currencies across the world, the value of all 179 non-US currencies is defined relative to the dollar, Worrell noted. This status quo is not dependent on US government policy, shifts in the US or global economy, or price movements of gold, oil or other commodities, he said. It also has not been dislodged by the emergence of cryptocurrencies built on blockchain technology or any other fintech innovation. “All economic values are based on the dollar,” he concluded.
Worrell frames the dollar’s global benchmark status as a historical convention, comparable to the widespread adoption of Greenwich Mean Time as a global time standard. He traced the 80-year evolution of this arrangement: after World War II ended in 1945, the global economy split into two separate geopolitical and economic blocs, with the United States holding overwhelming sway over trade and finance in the Western democratic sphere. This established the dollar as the reference currency for all nations outside the Soviet-led bloc. When the Soviet Union collapsed in the early 1990s, the dollar’s use as a global reference spread to every corner of the world.
Crucially, Worrell emphasized that the dollar’s dominance emerged from organic market practice rather than top-down policy mandate from the United States or global institutions. Individual consumers, multinational companies and financial institutions across the world have consistently chosen the dollar as the go-to reference for settling cross-border transactions. He offered a common example: a consumer in Jamaica purchasing goods from Chinese suppliers will almost always first calculate the cost in US dollars before converting the total to Jamaican dollars for their final budgeting.
This entrenched market preference has outlasted every challenge to the dollar’s status, Worrell argued. Even as major economies including post-war Germany, Japan and most recently China rose to become the world’s second-largest economy, global markets have retained the dollar as the primary settlement currency. The dollar’s benchmark position also emerged unscathed from the 2007–2008 global financial crisis and the subsequent downgrading of market confidence in US government creditworthiness.
Today, despite growing uncertainty around the direction of US policy and the global economic volatility this unpredictability generates, there is no evidence of a broad global shift away from the dollar toward the euro, renminbi or any other alternative currency to serve as the universal standard of value, Worrell said.