The share of currencies other than the U.S. dollar and the euro in international reserves is on the rise, according to a Russian representative. The trend is being observed as a growing number of countries try to use their national currencies in foreign trade settlements, the official noted.
Russia Sees Alternative Currencies Like Chinese Yuan Replacing U.S. Dollar in Reserves and Settlements
The share of the U.S. dollar in international reserves has dropped below 60% amid increasing use of alternative currencies in international settlements, the Spokeswoman of Russia’s Ministry of Foreign Affairs, Maria Zakharova, pointed out on Wednesday, quoted by the official Russian Tass news agency.
The Russian diplomat remarked that this indicator for the status of the greenback was at 72% in 2002. “The euro has now fallen to 19%, from 28% in 2008. By the way, the yuan has risen to 3%, a threefold growth since 2016,” Zakharova added. The report did not mention the source of the data she quoted.
Maria Zakharova also noted that many countries have increased their efforts to find ways to employ their national currencies in cross-border transactions. According to the Russian government official, the yuan is currently the most actively promoted alternative currency.
Encouraging the use of local currencies is a priority for the BRICS bloc of emerging economies of which Russia is a founding member. During the group’s summit in Johannesburg last week, Russian President Vladimir Putin described de-dollarization as an “irreversible process” across the BRICS nations (Brazil, Russia, India, China, and South Africa).
In a video address to participants in the BRICS Business Forum, Putin also said that this process is accompanied by efforts to develop new mechanisms of mutual settlements and highlighted that as a result the share of the dollar in export and import transactions within BRICS has declined to just 28.7% in 2022.
In May of this year, the Managing Director of the International Monetary Fund, Kristalina Georgieva, expressed confidence that the U.S. dollar will maintain its reserve currency status despite the de-dollarization trend. Earlier in August, South Africa’s representative in BRICS said that the dollar will continue to be a major global currency.
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