Introduction

COVID-19 pandemic has been a significant issue for the last few years. In January 2020, the

World Health Organization (WHO) first declared the disease an emergency. It has therefore

advanced into a global economic crisis. Since the outbreak, it has spread to more than two

hundred countries. This paper deals with COVID-19 impact on globalization, categorized into

three main parts: social, economic, and political globalization. The pandemic negatively affects

the global trade economy, and currencies are depreciating. Therefore, this essay will discuss the

depreciation of international trade and dollar crisis as some of the significant issues that the

COVID-19 pandemic has affected.

Impact of COVID-19 on globalization.

The spread of the disease has led to the disruption of global trade. World Trade Organization

(WTO) stated that there could be a fall in global trade volumes which was estimated to be 13 to

32 percent (Congressional research service, 2021). This could suggest that in the third quarter of

2020, there could be negative signs that the global trade could decline, but it is reflected clearly

in the second quarter. Global exports and imports fell by 7.2 to 7.4 percent in the first quarter,

reflecting the decline. There was an introduction of new trade measures on which the

government-initiated export bans such as surgical masks, disinfectants, and medicine. This is

evident that the pandemic has led to a severe effect on international trade.

Dollar crisis

COVID-19 led to a dollar crisis around the globe. Seventy-five years ago, the dollar became the

world currency as it emerged to be the most preferred currency used by investors to trade. The

dollar serves as a charging currency to enable global trade as it also accounts for two-thirds of
central bank foreign exchange holding. (Congressional research service, 2021). The dollar's

value depreciated after the onset of the pandemic in a slow curve, and its demands lessened.

This, therefore, suggest that there is disruption of the functioning dollar market due to the dollar

crisis. It can be argued that the rise of global trade instability could influence dollar stability.

Conclusion

The COVID-19 crisis has led to global economic interference and low economic production.

Furthermore, it has led to dollar depreciation affecting the world's dollar exchange. Therefore,

the pandemic has done more harm than good as the future is unpredictable.
References

Congressional research service (2021). Global Economic Effect of Covid-19. Global Economic

Effect of Covid-19, pp.39–55.