The International Monetary Fund’s (IMF) executive director for Russia says a growing number of countries are switching to trade in Chinese yuan, not only with China but also with third countries. He stressed that it is wrong for the U.S. dollar to be widely used globally given that the U.S. government uses the currency “for the purposes of national interests” and “the economic and financial obligations of one country.”
IMF Director on De-Dollarization Gaining Momentum Worldwide
The International Monetary Fund’s (IMF) executive director for Russia, Aleksei Mozhin, shared his thoughts on the global de-dollarization trend in an interview with RIA Novosti Monday.
He explained that Washington’s policies and actions have compelled countries around the world to seek alternatives to the U.S. dollar, noting that more nations are ramping up the use of alternative currencies, particularly the Chinese yuan, in cross-border transactions. The IMF executive director described:
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 associated the U.S. dollar’s long-standing dominance in the global economy with a lack of competition since most international settlements and deposits worldwide are in dollars. He pointed out that some U.S. officials have sounded the alarm on the risk of the USD losing its world’s reserve currency status.
Treasury Secretary Janet Yellen recently acknowledged that the use of financial sanctions could erode the dominance of the U.S. dollar. U.S. Senator Rand Paul similarly warned that the USD 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,” said the lawmaker.
Mozhin anticipates a gradual decline in the dominance of the USD, stating:
It’s clear that it will not happen at once, but the process has begun.
Russia has been replacing the U.S. dollar and euro with alternative currencies in foreign settlements, significantly reducing bank accounts and transactions involving Western currencies. The share of the dollar and euro in Russia’s international settlements dropped from 90% in early 2022 to below 50% by the end of last year, Russian Deputy Minister of Economic Development Vladimir Ilyichev recently revealed, emphasizing that this trend is likely to continue.
Noting that the U.S. government uses the dollar “for the purposes of national interests” and “the economic and financial obligations of one country,” the IMF director concluded that it is “wrong” for the USD to be widely used globally.
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