Thursday, June 20, 2024

According to a Russian authority, there is a growing trend towards diversifying international reserves to include currencies other than the U.S. dollar and the euro. The official indicated that this shift is particularly evident as more countries are exploring the use of their own national currencies for international trade settlements.

Russia Observes Growing Influence of Alternative Currencies Like the Chinese Yuan in Global Reserves and Transactions

Maria Zakharova, the Spokesperson for Russia’s Ministry of Foreign Affairs, cited on Wednesday that the U.S. dollar’s proportion in global reserves has declined to less than 60%, a significant change marked by the rising adoption of alternative currencies in international transactions. These comments were relayed by the Russian state-controlled Tass news agency.

Zakharova highlighted that the U.S. dollar’s share was 72% in 2002, and provided a comparative analysis with the euro, which she said has receded to 19% from its 28% standing in 2008. Additionally, she pointed out that the Chinese yuan has experienced a threefold increase since 2016, now constituting 3% of global reserves. However, the source of this data was not disclosed in the report.

Zakharova further emphasized that an increasing number of nations are making concerted efforts to leverage their own currencies in international dealings. She specifically mentioned that the Chinese yuan is the most aggressively promoted alternative at this time.

BRICS Economies Prioritize Local Currency Utilization

The BRICS coalition of emerging economies, of which Russia is a foundational member, prioritizes the use of local currencies. During the recent summit in Johannesburg, Russian President Vladimir Putin stated that the trend toward reducing dependency on the U.S. dollar—referred to as de-dollarization—is “an irreversible process” that is gaining traction among BRICS countries (Brazil, Russia, India, China, and South Africa).

In a digital address to attendees of the BRICS Business Forum, Putin elaborated that initiatives are underway to establish new mechanisms for mutual settlements. He underscored that, as a consequence, the U.S. dollar’s role in BRICS nations’ export and import transactions had dwindled to 28.7% in 2022.

Views from International Stakeholders

In May of the current year, Kristalina Georgieva, the Managing Director of the International Monetary Fund, expressed her belief that the U.S. dollar will retain its role as the world’s reserve currency, notwithstanding the ongoing de-dollarization. Similarly, South Africa’s delegate to BRICS conveyed in August that the U.S. dollar will continue to be a dominant global currency.

What are your thoughts on the future of the U.S. dollar’s share in global reserves? Please share your perspectives in the comments section.

Frequently Asked Questions (FAQs) about de-dollarization

What is the main topic of the article?

The article primarily discusses the declining share of the U.S. dollar in international reserves and the rise of alternative currencies, notably the Chinese yuan. Maria Zakharova, a Russian Foreign Ministry Spokesperson, is cited to substantiate these trends.

Who is Maria Zakharova?

Maria Zakharova is the Spokesperson for Russia’s Ministry of Foreign Affairs. She was quoted discussing the changes in international reserves, emphasizing the decline of the U.S. dollar’s share and the rise of alternative currencies like the Chinese yuan.

What has happened to the share of the U.S. dollar in international reserves?

According to Maria Zakharova, the share of the U.S. dollar in international reserves has decreased to below 60%. She contrasted this with the dollar’s 72% share in 2002.

How has the Chinese yuan’s share in international reserves changed?

The Chinese yuan has experienced a threefold increase in its share of international reserves since 2016, now making up 3% of the total, as per Maria Zakharova.

What did Russian President Vladimir Putin say about de-dollarization?

During a recent BRICS summit, Russian President Vladimir Putin described de-dollarization as an “irreversible process” among BRICS nations. He also stated that the dollar’s role in BRICS export and import transactions had declined to 28.7% in 2022.

What is the BRICS bloc, and why is it relevant?

BRICS is a coalition of five major emerging economies: Brazil, Russia, India, China, and South Africa. The group has been emphasizing the importance of reducing dependence on the U.S. dollar and promoting the use of local currencies.

What did Kristalina Georgieva, the Managing Director of the IMF, say about the U.S. dollar?

Kristalina Georgieva expressed confidence that the U.S. dollar would continue to serve as the world’s reserve currency despite the de-dollarization trend.

What is the current share of the euro in international reserves?

According to Maria Zakharova, the euro’s share in international reserves has dropped to 19%, down from 28% in 2008.

Is the data source mentioned for the statistics quoted?

No, the source of the data quoted by Maria Zakharova in the article is not disclosed.

How does the article suggest readers engage further with the topic?

The article invites readers to share their thoughts and perspectives on the future of the U.S. dollar’s share in international reserves in the comments section.

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