International Monetary: Countries are reconsidering their heavy dependence on the US dollar
International Monetary: Countries are reconsidering their heavy dependence on the US dollar
2024-05-08 21:33
Shafaq News/ Some countries are working to reduce their dependence on the US dollar due to the tremors resulting from the Covid-19 pandemic and the conflict in Ukraine, as well as out of national security interests.
This was announced by Gita Gopinath, First Deputy Director General of the International Monetary Fund, and she said in her speech at Stanford University (California): “Some countries are reconsidering their heavy dependence on the US dollar in international transactions and reserves.”
Gopinath added that after several “years of turmoil,” including due to the COVID-19 pandemic and the conflict in Ukraine, countries are “reviewing their trade partnerships based on economic and national security considerations.”
But she stressed that “despite all the increasing geopolitical risks, the US dollar remains dominant.”
She said: “According to data from the SWIFT payment system, [the dollar] represents about 80% of trade financing. It also constitutes about 60% of foreign exchange reserves, despite the gradual diversification of foreign exchange reserves from the dollar to non-traditional reserve currencies such as the Australian dollar and the Canadian dollar.” “.
She noted that among US-focused countries, the “currency structure for financing trade” did not change much during the 2022-2023 period. But among China-oriented countries, the changes were “more pronounced.”
“In the Chinese bloc, the share of the US dollar in trade finance payments has declined since the beginning of 2022,” Gopinath continued. “At the same time, the share of the renminbi (RMB, the official name of China’s national currency) has more than doubled – from about four to eight percent.” .
A few days ago, American businessman Elon Musk warned that the US dollar would lose its value due to growing distrust of it, if the public debt problem in the United States was not resolved.
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