19/04/2023
🚨NO MORE U.S DOLLAR DEPENDENCE...Some Countries view the dominance of the U.S. dollar as a threat to their sovereignty, to their independence and want reduce the influence of the U.S. on their economy.
🇪🇺🇨🇳 Yesterday, France said Europe should reduce dependence on the U.S. dollar. A week ago, France settled their first gas trade using the Chinese Yuan, this has always been done using U.S Dollars!
🇸🇦🇨🇳Saudi Arabia said that they were open to trading in currencies besides the U.S. dollar and last week, Saudi Arabia announced a new oil facility using Chinese Yuan worth $12.2 billion.
🇷🇺🇨🇳The Chinese yuan also has replaced the dollar as the most traded currency in Russia. Russian companies issued bonds in Yuan worth the equivalent of more than $7bn last year
🇮🇷 Yesterday Iran said they are reducing their dependence on the U.S Dollar for regional and international trade.
🇧🇷🇨🇳 Brazil and China agreed to use their own currencies when settling financial transactions and Yuan passes Euro to become Brazil's second-largest currency in foreign reserves.
🇦🇪🇮🇳 The UAE and India are in talks to use rupees to trade non-oil commodities in a shift away from the dollar.
🇲🇾🇨🇳 Malaysia’s Prime Minister, Anwar Ibrahim said China was open to forming an Asian Monetary Fund, reviving a decades-old proposal to reduce reliance on the dollar.
Why?
• The U.S. monetary policy can have significant impacts on the global financial system (The FED's decision caused financial turmoil in EM economies).
• The concentration of the global financial system on the U.S. dollar can also create instability.
• U.S has a large national debt, and there are concerns about the ability to pay its debts in the long term.
• The abuse of economic sanctions by the U.S. government has also played a significant part in de-dollarization.
• Countries that hold significant amounts of dollars in their foreign reserves are exposed to currency risk, which can be costly and difficult to manage.
• The U.S. dollar's dominance in international trade can also create trade imbalances between countries.