Why world currencies are based on U.S.dollars?
If a nation conducts a lot of trade with another nation, there are advantages to keeping you own currency pegged to that one. It makes bussiness easier because the relative value of the currencies do not change, and this makes forward investment projects and purchase contracts,w hich have time laggs, more predictable and thus have less risk associated with them. This was one of the bug arguments for gold standard back in the day, so that all nations could trade on a predictable currency. Particuarly if a nation is small, this makes sence. If your economy is relatively small, then the currency can chage a by a lot very quickly and cause a financial shock. So a lot of third world countries historically have either pegged their currencies to the dollar, the pound, the franc, or now the euro, or at least pegged them to a basket of currencies. Because of this pegging, the dollar is the largest reserve currency held by foreign central banks, that they keep in order to manipulate the valeu of
The way English is more or less common language in the world to understand other nationals culture, economy, political situation, geography etc through interpretetion or translation and that is how we are used to, similarly, US Dollar is a common currency to Global economy and that is how it can determine or compare other countries economy or growth, it is just a parameter or unit, that is all and we are used to. If we use any other currency like Euro or any other new name of Global currency to run global trade etc, it wil be the same.
