Russian President Vladimir Putin has discussed the end of the U.S. dollar dominance, claiming that Russia has nothing to do with the USD’s downfall. “We have never had and do not have the goal of de-dollarization,” Putin also stressed, highlighting global trends that could lead to the end of the U.S. dollar.
Putin Discusses the ‘End of the Dollar’
Russian President Vladimir Putin responded to some questions Friday regarding de-dollarization and the U.S. dollar potentially losing its dominance during a plenary session at the St. Petersburg International Economic Forum (SPIEF).
Putin was asked whether the allegations that he is using Russia’s conflict with the U.S. to speed up the process of de-dollarization were true, and if so, what the outcomes would be for him if the U.S. dollar loses its hegemony in the international financial system. The Russian president replied (translated by Google):
First of all, I want to say … we have never had and do not have the goal of de-dollarization of the Russian economy. And, there has never been and there is no goal of de-dollarization or influencing the de-dollarization of the world economy.
“The influence of one or another currency on the world economy is directly related to the economic potential of the country that is the issuer of the currency,” Putin clarified.
However, he asserted that the U.S. economy “is now inferior to the Chinese economy in terms of purchasing power parity,” stating that “the Chinese economy has overtaken the American one in volume.”
Nevertheless, Putin noted that the U.S. still has “a great economy,” emphasizing: “This is an obvious merit of the American people, talented, capable, nobody denies it. It’s just that today’s political leadership abuses the trust of the Americans, the trust of the American people.”
The Russian president proceeded to discuss the U.S. government weaponizing the dollar and the potential consequences of the USD losing its dominance — a matter that has raised concerns among various individuals, including Treasury Secretary Janet Yellen. In April, the Treasury Secretary acknowledged the risk associated with using financial sanctions tied to the role of the dollar, stating that over time it could undermine the dollar’s hegemony.
Using the dollar as an instrument of armed struggle, and there is no other way to put it, they raise doubts about the reliability of the American currency both as a settlement instrument in world trade and as a means of accumulation, a means of reserves.
“The reserves of world countries with large economies in dollars are declining from year to year. Not as fast as, perhaps, as some would like, but they are declining,” Putin described. “Just as settlements in the world economy in dollars are reduced, settlements in euros are also reduced. Settlements in national currencies are growing, for example, in yuan, in some currencies of the Arab countries.”
The Russian president added: “It is not by chance that ideas and projects to create their own currencies are being born in Latin America, and it is no coincidence that the Arab world has long been talking about creating its own single national currency, and Asia is talking about it. The share of settlements in yuan is growing. If oil producers in the leading Arab countries are now saying that they are ready to pay in yuan for oil, you know, we have absolutely nothing to do with it.” Putin emphasized:
If this trend picks up momentum on the exchanges or other oil and gas exchanges appear, and settlements are not made in dollars, this is the beginning of the end for the dollar. We have nothing to do with it.
“It is they themselves who do everything with their own hands, and this gives me every reason to believe that today’s political elites are abusing the trust of the American people and are themselves leading to the negative consequences that I have mentioned,” Putin concluded. In May, the Russian president said the multipolarity trend will intensify and those who do not follow this trend will lose.
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