A professor from the University of British Columbia in Canada said that the U.S. dollar is not as important for trading and saving as it once was. He said other currencies are becoming more common when it comes to buying things and storing money.
US Dollar Decreasing in Strength
Last week, James Brander, an economist from Canada, talked about the decreasing amount of people using American dollars and how this is making the U.S. dollar less important. He works in the Strategy and Business Economics Department at the University of British Columbia.
A well-known economist recently stated that the U.S. dollar’s strength in the global market is gradually decreasing. This means more and more countries are choosing to pay for international transactions with their own money instead of using the USD. Even though the USD is still the most popular currency in the world, its importance is slowly waning. He said that around half of all worldwide currency reserves are made up of US dollars, but its role as a reserve currency has been declining in recent years.
In recent times, money from other countries is being used more and more in international activities and as backup money. This trend has become more popular due to some global issues that are happening right now, especially involving Russia, China, and some other places.
The professor explained that in some cases, countries are trading with each other using their own local currencies, rather than using American dollars. He doesn’t think that’s a bad thing.
When the U.S. uses economic sanctions against countries, like Russia, this can make them move away from using the USD (United States Dollar). The U.S. Treasury Secretary said that could cause a problem because if many countries stop using the USD, it would affect how strong the value of it is. Countries like China, Russia and Iran think that finding an alternative to using the USD is a good idea because of these sanctions.
The countries in the BRICS group (Brazil, Russia, India, China, and South Africa) are planning to reduce their reliance on using the U.S. dollar in business activities. They are working on introducing a new common currency they can all use instead. The BRICS leaders will meet at a summit in August to discuss this idea further. At the same time, 10 other countries from Southeast Asia have also decided to start trading with each other more using their own currencies.
Do you think that people around the world don’t use the U.S. dollar as much anymore in different trades? If so, tell us in the comments section!