https://sputnikglobe.com/20230614/us-treasury-chief-in-denial-over-dollar-decline-as-dominant-currency-1111140281.html
US Treasury Chief in Denial Over Dollar Decline as Dominant Currency
US Treasury Chief in Denial Over Dollar Decline as Dominant Currency
Sputnik International
Unprecedented western sanctions and trade embargoes on Russia have finally pushed the world's biggest fossil fuels and grain exporter to take payment in its main trading partners' currencies — cutting demand for the US dollar.
2023-06-14T13:24+0000
2023-06-14T13:24+0000
2023-06-14T13:24+0000
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US Treasury Secretary Janet Yellen has denied the dollar could lose its position as the global reserve and trade currency.Testifying before the House Financial Services Committee on Tuesday, the finance minister tried to downplay the risk de-dollarization in response to sanctions on Russia for its de-Nazification operation in Ukraine.Russia — a major exporter of fossil fuels, uranium, metals, food grains and fertilisers — has responded to freezes on its overseas accounts and exclusion from the SWIFT international banking system by settling transactions with its trade partners in their national currencies.India switched to its rupee currency for trade with Russia — including rapidly increasing oil imports — last December.Furthermore, Saudi Arabia, once one of Washington's staunchest allies in the Middle East, has begun taking payment for oil exports to China in the Chinese yuan, also known as the renminbi.Such developments could undermine demand for the dollar, leading to a slump in its exchange rate and inflation on imported goods for ordinary Americans.The treasury chief admitted that sanctions had played a role in those moves, but insisted that "the dollar plays the role it does in the world financial system for very good reasons that no other country is able to replicate, including China."Democratic Texas Representative Vicente Gonzalez asked whether the US should scale back its multitude of sanctions on other nations for fear of driving other countries away from the dollar.
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us dollar hegemony as international trade and reserve currency, sanctions on russia over the special military operation in ukraine, will the dollar lose its dominance as world reserve currency?
us dollar hegemony as international trade and reserve currency, sanctions on russia over the special military operation in ukraine, will the dollar lose its dominance as world reserve currency?
US Treasury Chief in Denial Over Dollar Decline as Dominant Currency
Unprecedented western sanctions and trade embargoes on Russia have finally pushed the world's biggest fossil fuels and grain exporter to take payment in its main trading partners' currencies — cutting demand for the US dollar.
US Treasury Secretary
Janet Yellen has denied the dollar could lose its position as the global reserve and trade currency.
Testifying before the House Financial Services Committee on Tuesday, the finance minister tried to downplay the risk
de-dollarization in response to sanctions on Russia for its de-Nazification operation in
Ukraine."We should expect over time a gradually increased share of other assets in reserve holdings of countries — a natural desire to diversify," Yellen conceded, but insisted that "the dollar is far and away the dominant reserve asset."
Russia — a major exporter of fossil fuels, uranium, metals, food grains and fertilisers — has responded to freezes on its overseas accounts and exclusion from the SWIFT international banking system by settling transactions with its trade partners in their national currencies.
India
switched to its rupee currency for trade with Russia — including rapidly increasing oil imports — last December.
Furthermore, Saudi Arabia, once one of Washington's staunchest allies in the Middle East, has begun taking payment for oil exports to China in the
Chinese yuan, also known as the renminbi.
Such developments could undermine demand for the dollar, leading to a slump in its exchange rate and inflation on imported goods for ordinary Americans.
The treasury chief admitted that sanctions had played a role in those moves, but insisted that "the dollar plays the role it does in the world financial system for very good reasons that no other country is able to replicate, including China."
"We have deep liquid open financial markets, strong rule of law and an absence of capital controls that no country is able to replicate. It will not be easy for any country to devise a way to get around the dollar," Yellen said.
Democratic Texas Representative Vicente Gonzalez asked whether the US should scale back its multitude of sanctions on other nations for fear of driving other countries away from the dollar.
"I would say there is virtually no meaningful workaround for most countries for using the dollar as a reserve currency," Yellen claimed.
