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Thursday, September 21, 2023


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WorldAsiaIs the dominance of the dollar in decline?

Is the dominance of the dollar in decline?

Maha Mohammed Sharif

Interests may conflict with each other and the contradiction between them gradually disappears, and some facts that seem like miracles disappear, as some indicators indicate that the global economy may avoid a crisis of deep recession or depression, as it is necessary to return to the relations of the balance of power, and this balance always refers to seeing the variables What is happening and the realization of its transformation, as inflation rates are about to slow down in the countries of the eurozone and the US economy, “the largest economy in the world,” has not yet slipped into a contraction of gross domestic product. And the statement of US Federal Reserve Chairman Jerome Powell that the bank will not continue to raise the interest rate until it “paralyzes” the economy reassuringly.

This is an indicator that led central banks in major economies around the world to start changing the course of tightening monetary policy, “raising interest rates and withdrawing liquidity from the market” with the aim of stopping the rise in inflation rates, and there is a large wave of agreements that resist “dollarization” of transactions and efforts to exchange exports. in local currencies.

If it is said that there is a change, then this means (perhaps) that things will happen, and they will not continue to exist in the same previous states. Demands have escalated to end the dominance of the dollar over the global economy, after its value rose strongly against other currencies during the current year, and these are considered This goal is sufficient in itself, while others see it only as a stage for a further goal. Bloomberg reported that the global uprising is escalating against the dominance of the US dollar and international financial transactions, as Brazil and China recently concluded a deal to settle trade between them in their local currencies. In an attempt to break free from the hegemony of the dollar on their mutual exports.

Last April, India and Malaysia signed an agreement to increase the use of the rupee in cross-border trade. In the same vein, France, a permanent ally of the United States, began settling trade transactions in yuan, knowing that China has endeavors confirming the strengthening of the yuan’s role in the global financial system, expanding its scope and resisting hegemony. dollar as one of its top priorities.

Despite all the concerns about the US dollar losing some of its dominance in trade and the world of finance on the international scene, Moody’s Investors Service says that the US currency is likely to maintain its position despite all the challenges, and Moody’s analysts wrote in a research note, “We expect the emergence of A multipolar currency monetary system over the next few decades, led by the dollar itself as rival currencies will struggle to fully emulate its range of use, safety and convertibility.

However, the strengthening of the economic influence of the “BRICS” will appear under the heading of the character of change coming, and the intensification of efforts to disengage from the dollar continues unabated in the developing countries of the world, and the foreign ministers of the “BRICS” group of countries discussed how the bloc can enhance its influence globally and establish a common currency, which may Have a reality that you can not achieve its goal.

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Arab Desk
Arab Desk
The Eastern Herald’s Arab Desk validates the stories published under this byline. That includes editorials, news stories, letters to the editor, and multimedia features on easternherald.com.

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