Monday, June 5, 2023

Will Russia Altogether Abandon the US Dollar?

Russia has hit the Americans in the ‘dollar’, emphasizing that the US dollar is losing assets. Russian President Vladimir Putin has had the Trump administration worried by saying that the instability in dollar calculations fuels the desire of many global economies to find alternative reserve currencies and create settlement systems independent of the US dollar.

Putin said they were not looking at abandoning the dollar. “Its the dollar that is abandoning us, and those who take these respective (sanctions) decisions are shooting themselves not even in the foot but a bit higher.” The US dollar for decades has been the world’s main reserve currency and the medium of exchange for trade in oil, copper, and other vital commodities.

With the US strengthening Iran sanctions, Russia is speeding up efforts to stop using the US dollar in global trade, particularly in oil sales that are vital to Moscow and Tehran. The Russian Deputy Foreign Minister Sergei Ryabkove in an interview with International Affairs magazine on August 23 had said: “the time has come when we need to go from words to actions and get rid of the dollar as a means of mutual settlements and look for other alternatives.”

According to Putin, assets in dollars even held by the biggest holders are shrinking. He has called on the United States to abandon the policy of unilateral sanctions and seek common ground.

Russian Energy Minister Aleksandr Novak has highlighted the fact that a number of countries are interested in replacing the dollar. “There is a common understanding that we need to move towards the use of national currencies in our settlements. Novak said Russia was in talks with Turkey and Iran. “We are considering an option of payment in national currencies with them. This requires certain adjustments in the financial, economic and banking sectors.”

Analysts say that using the US dollar as a weapon could backfire on Washington and eventually lead to the toppling of the currency’s status in the world. And this could prove devastating for the US in the long run.

More News at EurAsian Times


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