The king dollar has been faltering in recent months, and other economies intend to take advantage of it. Calls for “de-dollarization” are growing among the BRICS countries and Latin America. Focus on a basic trend, which should only increase.
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L’Iran, la Russie et la Chine font front et appellent à la « dédollarisation »
Calls for dedollarization that become constant
Could this be the beginning of the end of the reign of the USD? The leaders of several economically developing countries are multiplying statements to this effect, while the United States seems to be entangled in its inflation problems. This is of course a political issue as much as an economic one. The President of the Islamic Republic of Iran, Ebrahim Raisi, thus recently evoked a monetary “dominance” of the United States:
“The base of the western domination system was the dominance of the dollar.»
The remark was made during a meeting of the Shanghai Cooperation Organization (SCO), which brings together several Central Asian countries. In particular, it made it possible to integrate Iran as a member. Among others present were the Russian and Chinese presidents: Vladimir Putin and Xi Jinping. The latter called for rely on more local fiat currencies within the region:
“I consider it essential to increase the share of payments in national currencies.»
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Dedollarization polarizes the world
Vladimir Putin said that exchanges between the countries present are increasingly based on currencies other than the dollar :
“More than 80 percent of trade transactions between Russia and the People’s Republic of China are conducted in rubles and yuan. The ruble’s share in export transactions with all SCO countries exceeded 40% in 2022.»
It will be recalled that Iran, China and Russia are all three economically sanctioned by the international community, and that their access to the dollar has been limited by the United States for some. It is therefore a global and crucial strategy for these countries.
Calls for dedollarization also extend beyond Central Asia. The BRICS countries (Brazil, Russia, India, China and South Africa) have multiplied declarations to this effect in recent months. Latin America is also particularly fertile ground for dedollarization. The President of Brazil, Luiz Inacio Lula Da Silva (Lula), affirmed his hostility to the dollar last week:
“The Bretton Woods institutions no longer work, and no longer meet the aspirations and interests of society. We have to be very clear with this.»
This week, Bolivian President Luis Alberto Arce Catacora also called on Southern Common Market (Mercosur) countries to “de-dollarize”:
“We are living a crucial moment of transition towards a multipolar world which guarantees the balance of power and respects the principle of non-interference.»
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Two visions currently oppose
Asia and Latin America therefore seem to be engaged in a process of dedollarization, and are counting on the weakening of the USD to reshuffle the cards. On the United States side, We are of course worried about this eventuality., and several commentators consider that questioning the dollar entails risks for the global economic balance. But the dominance of the dollar, which has existed since the end of World War II, continues to decline.
Economic alliances are therefore being strengthened between countries wishing to rid themselves of the influence of the dollar. And this is accompanied by a greater economic weight than before. The GDP of the BRICS countries has now exceeded that of the G7 countries. It is therefore a major revolution that is underway.
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Source: Shanghai Cooperation Organization, Business Standard
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Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
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