This paper aims to examine the impact of United States (US) financial sanctions on the international dominance of the US dollar.
The survival analysis technique, which incorporates survival and hazard probabilities to determine the probability of central banks' reserve recalibration, is adopted for analysis.
The result shows that the probability of central banks recalibrating the dollar share of their official reserve currencies would increase by 60% for every ten additional financial sanctions by the United States. This could imply that more sanctions might have unintended consequences on the international reserve currency dominance of the US dollar.
To the best of the authors’ knowledge, this study may be a novel attempt to use survival analysis to examine the impact of financial sanctions on the US dollar’s international reserve currency dominance.
