IMF Director Highlights Worldwide Trend Towards De-Dollarization
In a recent interview, the International Monetary Fund (IMF) executive director for Russia, Aleksei Mozhin, shed light on the escalating de-dollarization movement, highlighting how countries worldwide are actively seeking alternatives to the US dollar. He said it is not justified for the US dollar to be widely accepted globally as the US government uses the currency “for the purposes of national interests” and “the economic and financial obligations of one country.”
De-Dollarization Surges as Iranians, Brazilians, and Saudis Embrace the Chinese Yuan
Alexsei Mozhin, executive director of the International Monetary Fund (IMF) for Russia, explained the global de-dollarization trend in an interview with RIA Novosti on Monday.
He spoke at length about Washington's policies and actions as the driving force behind this global shift, compelling nations to explore alternative currencies to the US dollar. Mozhin emphasizes the rising adoption of the Chinese yuan by nations like Iran, Brazil, and Saudi Arabia, not only in their trade with China but also in cross-border transactions with other countries. The IMF executive director said:
"We can see that Iranians, Brazilians, and Saudis are already switching to trade in yuan, not only with China but also with third countries."
Mozhin notes that the long-standing dominance of the US dollar in the global economy has created a lack of competition, resulting in most international settlements and deposits being denominated in dollars. However, he also highlights concerns raised by US officials regarding the potential decline of the dollar's status as the world's reserve currency.
Janet Yellen, the US Treasury Secretary, recently acknowledged that the use of financial sanctions could end the dominance of the US dollar. Senator Rand Paul has also warned that the US dollar is losing its hegemony. “I think our foreign policy has something to do with that … We’ve pushed all of our adversaries farther and farther away from us and closer and closer together,” the lawmaker explained.
Mozhin envisions a gradual decline in the dollar's dominance, acknowledging that this process will take time, stating:
"It’s clear that it will not happen at once, but the process has begun."
Fundamentally "Wrong" for Global Dollar Use
He cites recent moves by Russia to replace the dollar and euro in foreign settlements with alternative currencies, leading to a significant reduction in bank accounts and transactions involving Western currencies. Russia's experience reflects a decline from 90% to below 50% in the share of the dollar and euro in international settlements by the end of last year, revealed the Russian Deputy Minister of Economic Development Vladimir Ilyichev.
Drawing attention to the US government's utilization of the dollar for "the purposes of national interests" and “the economic and financial obligations of one country,” the IMF director argues that it is fundamentally "wrong" for the dollar to maintain its widespread global use. The implications of these developments raise questions about the future of the US dollar as a dominant global currency.
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