Origin Dictionary / OD-089
Dollar
Two businesses outside America can still need dollars to do business together.
01Dictionary Meaning
Here, Dollar means the US dollar: the United States' currency and a widely used unit for international prices, payments, borrowing and reserves.
02What People Think
"The dollar matters mainly when buying something from the United States."
03What’s Underneath
A buyer and seller can agree on a dollar price even when neither is American. A borrower earning local currency can owe payments in dollars.
Those choices connect local business conditions to exchange rates and the availability of dollar funding. If the local currency weakens, obtaining the dollars needed for a fixed payment can become more expensive.
Repeated use creates supporting markets and familiar practices. The dollar's international role therefore lives in contracts, financing and payment arrangements as well as in banknotes.
04The Game
In which currency is the price set, the income earned and the debt owed, and who carries the risk when those currencies move apart?
05One Line
A dollar debt can make a local business answer to a foreign exchange rate.
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References 1
- The International Role of the U.S. Dollar - 2025 Edition
Federal Reserve Board