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Tuesday, July 16, 2024

IMF Executive Director Says Global De-Dollarization Trend Due To US Policies

In a recent interview with RIA Novosti, Aleksei Mozhin, the International Monetary Fund’s (IMF) executive director for Russia, pointed out that the de-dollarization movement is gaining momentum across the globe due to Washington’s policies and actions. Mozhin highlighted how the call for de-dollarization is not only being observed in trade with China but also in transactions with third countries.

A Shift Towards Alternative Currencies

Mozhin observed that numerous nations are increasing their utilization of alternative currencies, particularly the Chinese yuan, in cross-border transactions. This transition, while not expected to occur immediately, has undoubtedly begun. Mozhin anticipates a gradual decline in the dominance of the US dollar as more countries explore alternatives.

Concerns Over Dollar’s Reserve Currency Status

Mozhin drew attention to US officials who have expressed concerns about the potential risk of the dollar losing its status as the world’s primary reserve currency. He linked the longstanding supremacy of the US dollar in the global economy to a lack of competition, as international settlements and deposits predominantly occur in dollars.

US Actions and De-Dollarization

US Treasury Secretary Janet Yellen recently acknowledged that the employment of financial sanctions could contribute to the erosion of the dollar’s dominance. Moreover, Senator Rand Paul emphasized that the dollar’s diminishing hegemony could be attributed to certain aspects of US foreign policy that have driven adversaries closer together.

Global Usage of the Dollar: A Matter of Concern

Mozhin expressed his belief that the US government has utilized the dollar primarily for its national interests and economic obligations. He deemed it “wrong” for a single currency to be extensively employed on a global scale. Mozhin’s assertion aligns with the ongoing discourse surrounding the need for a more diversified global currency landscape.

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