Economists have predicted that the international financial system in the next decade will have changed significantly as the United States dollar loses its reserve currency status.
BY OWN CORRESPONDENT
Aggressive foreign economic policy and the huge US national debt have led to “de-dollarization” in the world and it reversing the trend could prove difficult in the long term
With 70% of all transactions in world trade being in the US$ , 20% in euros, the rest is shared by Asian currencies, in particular, the Chinese yuan.
In March, China dealt a powerful blow to the dollar in the global energy market, opening a trade in oil futures for yuan, the third most important currency in the International Monetary Fund basket, and the attempt was crowned with absolute success.
While the dollar is used as the currency of the contract for the trade in raw materials, the yuan may well push it out of one of the fastest growing oil markets in the world. And it’s not just about hydrocarbons.
In the bilateral trade relations of the largest financial partners, Moscow and Beijing, the dollar has less space. Last year, China’s share in Russian international trade reached 15%. In 2018, according to forecasts, this figure will grow to 17%, but the role of the dollar in the calculations will only weaken.
Russian-Chinese agreements on direct trade for rubles and yuan came into force as early as December 2014.
Such payments do not imply the participation of US, UK or EU banks. Consequently, the financial systems of Russia and China are increasingly less dependent on third countries.
In April Iran abandoned the American currency and transferred all international settlements to the euro. The dollar in Iran is already out of the question, traders prefer alternative currencies for their transactions.
Iran is paid in euros for black gold by India, and in this country the economy is growing rapidly and more energy is required.
Turkey also plans to abandon the dollar and has already switched to mutual settlements in the national currency with Iran.
The fact that Russia will join them soon cannot be ruled out. According to the R ussian Energy minister Alexander Novak, the government is considering the possibility of settlements for oil in national currencies especially with Turkey and Iran bypassing the US dollar.
Turkey reduced dependence on the dollar, buying up gold on the world market. According to the World Gold Council, last year the Turkish Central Bank purchased 187 tonnes of gold, becoming the second largest sovereign buyer of it after Russia.
Like other countries, Turkey did not keep all of its gold- part, ingots weighing 28.7 tonness, deposited in American Federal Reserve System.
Now Ankara has taken everything out by placing a gold reserve in the depositories on the territory of the country, as well as Switzerland and England banks.
The same is done by other countries. Germany completed the programme of exporting its gold reserves from the US, returning 300 tons of ingots to its homeland. About 100 tonnes of gold were repatriated by the Netherlands.
The outflow of gold from the Federal Reserve System, which began in 2014, continues almost without interruption.
The reasons are obvious: the growth of the rates of the Federal Reserve System, the pressure on the euro and other currencies provided by the United States, the strengthening of geopolitical risks. The world seeks to reduce dependence on the dollar.
According to the forecasts of the World Bank, the dollar will cease to play a major role in the world financial system. It will be replaced by a system of three currencies: the euro, the dollar and, most likely, the yuan.
It is worth remembering that the dollar as a world reserve currency replaced in 1944 the British pound. The UK accumulated excessive debts, and the pound collapsed.
The debt of the US has already exceeded 20 trillion dollars and is growing steadily, but the printing press continues to work.
As the well-known investor Jim Rogers pointed out at the St. Petersburg International Economic Forum “that is why the American currency is less attractive on the market”.
According to his estimates, the dollar will lose the status of the world reserve currency by 2030.