The dollar's dominance in the world will diminish, due to increased pressure from emerging markets to raise interest rates to slow their economies over the next 18 months, Ray Dalio, founder & CIO of Bridgewater Associates told CNBC.
"It's inevitable that the dollar's role as the world's currency will diminish from the dominant world currency to one of a few," he said.
"It will fade probably fairly quickly so the United States which accounts for almost two-thirds of the reserves will probably go down to 50 percent of the world's reserves and it will have an effect on lending," he added.
Due to a new world order of indebted developed nations including the United States, the countries of the Euro Zone and Japan, and growing emerging economies which now account for 53 percent of the global economic growth, monetary policies in rising economies are "inappropriate," Dalio said.