Almost by stealth, certainly not by design, and partly because of setbacks in the euro area, Britain has recovered its role as a prime reserve currency country.
Along the way, the U.K. has benefited from the reserve-issuers’ “exorbitant privilege,” previously regarded primarily as the preserve of the U.S. This refers to the ability of a reserve-currency nation to print money that is acquired relatively expensively by foreign central banks, and thus helps subsidize the reserve country’s economy.
