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Since most nations on this planet import oil, the demand for dollars (although it isn’t gold-backed) persists. 86/ This was made potential by the promise from the US that its dollar might be redeemed for gold internationally (regardless that they made it illegal for US citizens to do the identical exchange domestically). 89/ If currencies are freely floating (like USD-INR), such continuously fluctuating charges adds distortion and uncertainty in international trade. 87/ Even without gold backing, the explanation the US greenback remains to be the global reserve foreign money is that they require oil-producing middle east areas to cost their oil in dollars (in trade for “protection” and “good relations”?). However, regularly US limited such conversion after which eliminated it. 88/ Today, the demand and provide for various fiat currencies is either freely decided in the market (freely-floating trade rates) or is determined by the nation (like in China where its central financial institution determines the Yuan-USD trade charge). So whereas US dollar was on the gold standard, other countries’ central banks kept their worldwide reserves in US dollars.