US dollar's dominion over global market in decline: Canadian scholar
A Canadian scholar confirms that the US dollar's dominion over the global market is in decline, citing a growing trend among world countries of conducting international transactions in their local currencies rather than the greenback.
"The US dollar is the major reserve currency. Well, over half of all international currency reserves in the world are US dollar reserves. But the role of the US dollar has been declining. It's still big, but it has been declining," James Brander, professor at the Sauder School of Business, University of British Columbia, said on Thursday.
"Other currencies have been getting more important in international transactions and as reserve currencies. Current geopolitical tensions have increased the move towards using other currencies...especially Russia, as well as China, and some other countries," he added.
Analysts say the global inclination towards substituting the US dollar with local currencies boils down to countries hoping to reduce their dependence on Washington and prevent it from further weaponizing its global dollar dominance.
In addition to Russia and China, observers cite Iran and Venezuela as cases in point when it comes to conducting one's economic affairs and important transactions independent of the dollar.
"More local currencies are being used for international transactions," Brander likewise noted.
"So, we've got a transaction between India and Russia and that's handled either in Indian currency or Russian currency. We're seeing more of that instead of US dollars. I don't see a problem with that," he stated.
The US's far-and-wide punitive measures against various countries have also been identified as another reason behind their trying to ditch the dollar in international trade.
Last month, the United States treasury secretary, herself, warned that sanctions imposed on other countries like Russia and Iran were threatening the dominance of the dollar over the global economic market.
"There is a risk when we use financial sanctions that are linked to the role of the dollar that over time it could undermine the hegemony of the dollar," Janet Yellen said on CNN on April 16.
"Of course, it does create a desire on the part of China, of Russia, of Iran to find an alternative," she added.
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