ECB’s Lagarde: US Dollar’s Role Has Slightly Diminished, `Future Will Tell`

19 June 2025

ECB’s Lagarde: US Dollar’s Role Has Slightly Diminished, `Future Will Tell`
Christine Lagarde, president of the European Central Bank, at the ECB Governing Council press conference on March 6, 2025. Photo by Angela Morant/ECB under CC BY-NC-ND 2.0.

By David Barwick – KYIV (Econostream) – European Central Bank President Christine Lagarde on Thursday offered a succinct and pointed analysis in support of a greater international role of the euro and a reduced importance of the US dollar.

During the Q&A following her speech at the 9th Annual Research Conference of the National Bank of Ukraine and the Narodowy Bank Polski, Lagarde noted that the dollar’s `role as a reserve currency for central banks has actually slightly diminished over the course of time`.

`The future will tell`how important the dollar would remain, she said. `But I`m not trying to suggest that this will change overnight, not at all.`

For a currency to acquire a high degree of international significance, it had to satisfy geopolitical, economic and legal requirements, she said.

`On the geopolitical front, I think the country that aspires to that role needs to demonstrate that it is a trading partner`, she said, observing that Europe had numerous trade agreements with others.

Reliability was also key, and `you need to be a territory which is attractive to investors`, she said, highlighting the `legal trust and confidence that economic actors have in Europe` as well as `the fact that we respect the rule of law` and `will abide by the rules of the international monetary order.`

Demonstrating all these characteristics `would be necessary for any currency to aspire legitimately to that enhanced role, and I hope we move in that direction`, she said.