(Reuters) – Federal Reserve Chair Jerome Powell stated on Wednesday he expects the U.S. greenback to stay the world’s reserve forex so long as democratic establishments and the rule of regulation stay in place within the U.S.

“The standing of the greenback because the world’s reserve forex is a vital factor to us,” Powell advised the Home Monetary Providers Committee. “I believe the rationale we’ve got that standing is basically attributable to our nice democratic establishments, the rule of regulation, and the truth that we’ve got, usually talking, had sturdy ranges of value stability.”

“I believe the greenback will stay the reserve forex so long as these issues are in place,” he stated.

The greenback share of official FX reserves fell to a 20-year low of 58% within the fourth quarter of 2022, in response to Worldwide Financial Fund knowledge.

Historical past reveals that world reserve forex standing “isn’t a everlasting standing, however it’s a lasting one,” Powell stated when lawmakers revisited the subject later within the session.

He stated there was no different nation that mixed options reminiscent of rule of regulation, value stability, sturdy democratic establishments, and open capital accounts.

“I believe within the case of america, so long as we keep these traits of our authorities and our nation we will proceed to be the world’s reserve forex,” he stated.