US Dollar is the Most Popular Currency for International Payments
The US dollar continues to hold its position as the most popular currency for international transactions, despite efforts from some countries to reduce its usage. Recent data from the Society for Worldwide Interbank Financial Telecommunications (SWIFT) reveals that in April, 42.71% of international settlements were conducted using the US dollar, surpassing other currencies like the euro. This highlights the ongoing preference for the US dollar in cross-border payments, even amidst discussions surrounding de-dollarization.
The US Dollar Holds Strong Despite the De-Dollarization Push
The US dollar's
prominence in international transactions has remained high despite recent
challenges. The data provided by the Society for
Worldwide Interbank Financial Telecommunications (SWIFT), an organization that
links banks from all over the world to make international settlements possible,
reveals that despite the US government's interventions to prevent bank
failures, and the potential consequences of failing to raise the debt ceiling have
not deterred its usage. The percentage of settlements using the US
dollar increased from 41.74% in March to 42.71% in April.
Euro and Other
Currencies in International Settlements
While the euro remains the second most
utilized currency in international settlements, its usage decreased to 31.74%
in April, down from 32.64% in March. Other currencies, such as the Japanese yen
and the Chinese yuan, have even lower usage rates. The Chinese yuan accounted
for only 3.51% of international payments in April, showing a decline from 4.78%
in March despite efforts to promote its internationalization.
Notably, some countries have started
exploring alternatives to the US dollar. Brazil, Argentina, and Bolivia have
expressed interest in settling bilateral payments using the Chinese yuan, while
Venezuelan President Nicolas Maduro has announced plans to shift away from the US
dollar. Russia, too, has sought to diversify its settlement options by
incorporating the Chinese yuan and national currencies.
Additionally, discussions among the BRICS countries are underway to potentially introduce a common currency that could challenge the dominance of the US dollar in the long run.
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