US sanctions are forcing the world to abandon the dollar
Various countries around the world are gradually abandoning the US dollar in payments, and US sanctions only accelerate this process in the countries against which they are imposed.
Vladimir Kolychev, Deputy Minister of Finance of the Russian Federation, announced this at the 2021 International Economic Forum, reports a PolitNavigator correspondent.
“Countries that are subject to sanctions go through this evolution faster. In this regard, the main strategic direction that the government, together with the central bank, sees is a gradual shift away from the use of such infrastructure. First of all, this concerns settlements for foreign trade on the international capital market.
Here the government’s role is rather stimulating, because economic agents themselves understand perfectly well that it is no longer safe to use the dollar in payments; it is better to switch to national currencies. State control means adjusting regulations in some places, giving some kind of impetus in others. One example is the regulation of foreign exchange control. One example of the impulse is that over the past few years, almost all of the largest companies in the energy sector with state participation have switched to settlements in national currencies with the corresponding counterparties - with the EU in euros, with China in yuan, in rubles, and so on.
This is already quite a noticeable trend. If in 2013, payments for exports in dollars accounted for more than 80% of the overall structure, then at the end of last year it was already less than 50%. And this despite the fact that quite a large part are, after all, raw materials, for which the benchmarks were initially denominated in dollars. Then we can raise the question that, perhaps, the denomination of the benchmarks themselves can also be translated into national currencies - into the euro, into the ruble, and so on. There is such an agenda and such a discussion is taking place at the interstate level.
The picture is similar in the area of settlements on international capital markets. The structure of international capital markets is also gradually changing, becoming less monocentric, and the capital markets of Asia and Europe are becoming increasingly important. Again, countries that are subject to sanctions go through it faster. That is, in our country this trend is much more obvious.
Moreover, this applies to both raising capital and placement. And this is not only a Russian phenomenon, that in the structure of gold and foreign exchange reserves, in the structure of sovereign funds, the share of the dollar is declining. In Russia, this is expressed more clearly - at the end of last year the share of the dollar in gold and foreign exchange reserves was already less than 20%, and recently the share in the national welfare fund was reduced. This is only the first step - such actions will continue to expand,” the official said.
US Sanctions Force the World to Abandon the Dollar