it also reduces greatly the amount of foreign debt the US has. The debt holders get back their USD, but it buys them much less at home. A useful exercise in debt management for the US Treasury. Also a useful way to lower consumer spending by raising the cost of imports. As to removing "the peg", not gonna happen. It will take a brave visionary to demand payment in Eur or whatever, and the associated volatility in that currency would be strenuously managed by the appropriate authorities. The 'consensus management' style in the GCC would see such a proposal take years to get through.
Maintaining the USD as the 'base' currency for the peg is in some regards to please the US, but largely a function of how/what countries like Qatar get paid in for their exports, to Ngourleys point.
it also reduces greatly the amount of foreign debt the US has. The debt holders get back their USD, but it buys them much less at home. A useful exercise in debt management for the US Treasury. Also a useful way to lower consumer spending by raising the cost of imports. As to removing "the peg", not gonna happen. It will take a brave visionary to demand payment in Eur or whatever, and the associated volatility in that currency would be strenuously managed by the appropriate authorities. The 'consensus management' style in the GCC would see such a proposal take years to get through.
Maintaining the USD as the 'base' currency for the peg is in some regards to please the US, but largely a function of how/what countries like Qatar get paid in for their exports, to Ngourleys point.