---
title: "Exorbitant Privilege Definition | Model Diplomat"
description: "Exorbitant privilege refers to the economic advantages the US gains from the dollar's status as the world's primary reserve currency, impacting global finance."
url: "https://modeldiplomat.com/learn/glossary/exorbitant-privilege"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- Exorbitant privilege denotes the economic and financial advantages the United States derives from the US dollar's role as the world's primary reserve and transaction currency.
- Who coined the term 'exorbitant privilege' and when?
- How does the Triffin Dilemma relate to exorbitant privilege?
- Did the dollar's privilege end with the Nixon Shock of 1971?
- What threatens the dollar's exorbitant privilege today?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

Exorbitant privilege denotes the economic and financial advantages the United States derives from the US dollar's role as the world's primary reserve and transaction currency.

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In February 2022, the United States and allies froze roughly $300 billion of Russia's central-bank reserves after the Ukraine invasion, demonstrating the geopolitical leverage of dollar dominance — and accelerating de-dollarisation talks among BRICS states.

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