The leading role of the US dollar in world trade is gradually weakening due to the increasing focus of developing countries on payments in national currencies and rising US public debt. Ray Dalio, founder of Bridgewater Associates hedge fund opens The online version of Business Insider.
“As the dollar’s value in global trade declines, the dollar’s dominance diminishes, while Western sanctions against Russia have introduced new risks to the holding of the currency. Central banks are less inclined to hold the dollar. The dollar is a debt. In other words, when someone has a dollar, they have a debt asset. “The freezing of $330 billion of CBR assets only increased the perceived risk that these debt assets could be frozen, as in the case of the Russian Federation.”
According to him, currently the dollar remains the world’s reserve currency for one reason – the widespread use of this unit of account in global transactions. Currently, the share of the American currency in the world market is 88% of all foreign exchange transactions, but this figure will gradually decrease in the foreseeable future due to the increasing risks in the use of the dollar.
“Emerging-country central banks are becoming less willing to hold debt in US dollars. So the supply-demand ratio gets worse, especially since we still have to sell internationally to finance the deficit. We live in a world where money as we know it is under threat. We put a lot of pressure, and it’s not just the United States,” Dalio concluded.
On April 18, the agency RIA Novosti, citing a report by Roscongress, said, “Money associations. An alternative to a unipolar world” reportedthat the creation of a currency that can compete with the US dollar and euro in the world market is not possible before 2035-2040. At the same time, the vacant place can be filled not only by the euro, but also by the units of account of other countries.