[jmherbener]

Yes, the dollar is still a world reserve currency. Primarily, it means that foreign central banks hold dollar denominated financial assets as a reserve against the issue of their own currencies. They do so because, just like under Bretton-Woods, that’s how monetary inflation can be coordinated (or managed as our leaders like to say) for the entire world. Secondarily, it means that foreign commercial banks hold dollar denominated financial assets as reserves also. They do so because the largest capital markets in the world are denominated in dollars. Also, foreign businesses and persons hold dollar currency in conducting international trade and, in some places, as a medium of exchange superior to their domestic currencies.

Here are some statistics on foreign currency reserves:

http://www.imf.org/external/np/sta/cofer/eng/

Here are some statistics on central bank balance sheets:

http://www.yardeni.com/pub/peacockfedecbassets.pdf

Here is a Fed paper on dollar currency held overseas:

http://www.clevelandfed.org/research/commentary/1996/041596.htm