Not by Yuan Alone: Whole Set of National Currencies to Deep-Six US Dollar Dominance
The comments below are an edited and abridged synopsis of an article by Ekaterina Blinova
China’s yuan is gaining global momentum as Russia is set to use the currency in settlements with other world economies, while Brazil and China are ditching the US dollar in bilateral trade. What does the trend spell for the greenback’s dominance?
“This trend greatly affects the US dollar[‘s] hegemony negatively, in both foreign trade and financial market transactions, since an increasing share of them is not denominated in US dollars but in other currencies, notably in yuan,” Sergio Rossi of the University of Fribourg, Switzerland said. “This weakens the US position with respect to global financial activities, as well as in regard to the influence of US economic policy decisions – particularly the US Federal Reserve’s monetary policy stance – across the global economy.”
Up for discussion: Steady erosion of dollar dominance; why the yuan is unlikely to replace the US dollar; and what the future has in store for dollars.