The Triffin Dilemma states that the US dollar's role as the world's reserve currency creates conflicting pressures. To provide enough dollars for global trade, the US must run trade deficits, which weakens the dollar in the long run. This creates a dilemma: maintaining liquidity or ensuring dollar stability.
With the rise of other economic powers, the international financial order is changing. Countries are diversifying their reserves, reducing their reliance on the US dollar. This shift could erode the dollar's dominance and challenge the current global financial system's stability.
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