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General TradingT

Triffin Dilemma

The conflict between a country's domestic monetary policy objectives and its role as issuer of a global reserve currency, requiring it to run trade deficits to supply the world with its currency.

Example

The Triffin Dilemma explains why the U.S. persistently runs trade deficits — the world needs dollars for reserves and trade, forcing continuous outflows of U.S. currency.