De-Dollarization Part of ‘Trend’ But Unknown If Dollar Will Disappear

This photo illustration taken on January 6, 2017 shows Chinese 100 yuan notes and one US dollar notes in BeijingInternationalIndiaAfricaUNITED NATIONS (Sputnik), Lenka White – The dollar is swiftly losing its reserve status as part of an ongoing trend, but it is unclear whether the currency’s dominance will disappear, Russian Deputy Foreign Minister Alexander Pankin told Sputnik on Wednesday. “The process [of de-dollarization] is ongoing. It is a tendency and a trend,” Pankin said. “I don’t know if the dollar as such will disappear … But each dominant currency has its own life cycle.” Pankin pointed out that in the past, other currencies have also dominated international trade and finance for a limited periods of time, including the Dutch guilder, which was Europe’s de facto reserve currency in the 17th and 18th centuries, or the Portuguese escudo of the 20th century. Many emerging countries are now becoming stronger and subsequently their currencies are becoming more trustworthy, the minister added. Russia has in recent months been strengthening its economic cooperation with China and adopting the yuan currency for trade. In early April, the yuan replaced the dollar as the most traded currency in Russia, and the Chinese currency continues to penetrate a number of other markets around the world. RussiaHow Could US Sanctions on Russia Speed up De-Dollarisation and Help Rise of the Yuan?13 March 2022, 18:11 GMTThe minister noted that the trend of de-dollarization started much earlier but has been accelerated by the crisis in Ukraine. Many countries have been watching as Russian assets have been frozen — or as Pankin puts it, “arrested” by the US and its allies — and have realized that the same thing could happen to them. About $400 billion were withdrawn in 2022 from US Treasurys, and not only by “friends of Russia,” but also NATO and EU states. Pankin is visiting New York as part of Russia’s presidency of the United Nations Security Council for the month of May. Pankin will leave New York on Thursday, but his trip will be followed by visits by Russian Deputy Minister Sergey Vershinin and also by Russian Foreign Minister Sergey Lavrov, who will participate in UN meetings on April 24 and 25. Lavrov is also expected to meet with UN Secretary-General Antonio Guterres and discuss with him various issues, including the Black Sea grain deal.

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