According to a professor of economics from Canada at the University of British Columbia, the U.S. dollar’s importance in international trade and as a reserve currency has been dwindling. “Other currencies have been getting more important in international transactions and as reserve currencies,” he emphasized.
Highlights from Economist Rising De-Dollarization Trend Last week, Canadian economist James Brander discussed the global de-dollarization trend and the U.S. dollar’s declining dominance. At the University of British Columbia’s Division of Strategy and Business Economics, Brander teaches courses in the Asia-Pacific region.
According to him, as Press TV reported, the U.S. dollar’s dominance in the world market is waning as more nations choose to use their national currencies instead of the USD to settle international transactions. He noted that the dollar is “the major reserve currency” and that “over half of all international currency reserves in the world are U.S. dollar reserves.” Still, he added that the dollar’s importance has been waning. Even though it has been diminishing, it is still significant. Added the economist:
Other currencies are becoming increasingly significant as a reserve currencies and in international trade. The trend toward adopting foreign currencies has intensified due to current geopolitical tensions. Mainly Russia, China, and a few other nations.
The professor emphasized that “more local currencies are being used for international transactions.” “So, there’s a transaction between Russia and India, and it’s handled either in Russian or Indian currency. That is becoming more prevalent in place of US dollars. I don’t see anything wrong with that.
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It is commonly believed that the United States’ application of economic sanctions, particularly against Russia, has significantly influenced other countries’ decisions to abandon the US dollar. Last month, U.S. Treasury Secretary Janet Yellen said:
“There is a risk that using financial sanctions connected to the function of the dollar over time might erode the dollar’s hegemony. Of course, it makes China, Russia, and Iran want to look for a different solution.”
The BRICS countries—Brazil, Russia, India, China, and South Africa—have been stepping up their de-dollarization initiatives. A shared currency developed by the economic bloc will assist its members in reducing their dependency on the US dollar. The BRICS leaders are anticipated to debate the subject at their next leaders’ summit in August. 10 Southeast Asian countries also reached a recent agreement to promote the use of national currencies in transactions.
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