The Federal Reserve Building in Washington, USA.
Xinhua News Agency reporter Liu Jieshe
In recent months, many economies around the world have intensively introduced new measures to strengthen local currency settlement in cross-border trade and investment. Experts pointed out that influenced by the dollar risk factors and driven by the development needs of countries themselves, there is a global trend of "de-dollarization". But it is still too early to say that the dollar has collapsed. In the future, with the in-depth development of multi-polarization in the world, countries will have new demand for the development of payment and settlement mechanisms in economic and trade cooperation, which will hopefully promote the exploration of international currency diversification.
Many countries "pull away" from the US dollar
According to the website of The Indian, the Indian Foreign Ministry recently issued a statement saying that India and Malaysia have agreed to use Indian Rupee for trade settlement. The United Bank of India and others will provide support for this new mechanism. According to the report, this move shows that India is willing to take concrete measures to realize the "dollarization" of its international trade.
There are other major economies trying to settle in local currency. Agence France-Presse reported recently that China and Brazil have reached an agreement that RMB or Brazilian real can be used for settlement in bilateral trade between the two countries in the future, instead of using the US dollar as an intermediate currency. The Brazilian Trade and Investment Promotion Agency said in a statement that it is expected that this will reduce costs and promote more bilateral trade and investment.
According to the website of ASEAN Briefing, the meeting of ASEAN finance ministers and central bank governors was recently held in Indonesia. The first agenda of the meeting is to discuss how to reduce the dependence of financial transactions on US dollars, euros, Japanese yen and British pounds and turn to local currency settlement. At the meeting, Indonesian President joko widodo also urged other ASEAN countries to use credit cards issued by local banks and gradually stop using foreign payment systems, including Visa and MasterCard in the United States.
Prior to this, Iraq, OPEC’s second largest oil producer, also announced new international trade settlement measures. According to Reuters, the Iraqi Central Bank said on February 22nd that the country plans to allow the settlement of import trade from China in RMB for the first time. Previously, the country’s trade with China has been settled in US dollars. Iraq’s central bank said that the new regulations will improve Iraq’s access to foreign exchange.
Latin America is also on the move. According to the Financial Times, in January this year, Brazilian President Lula and Argentine President Fernandez announced that the two countries would make preparations for the creation of a common currency belonging to Latin America and would invite other countries in Latin America to join in order to promote regional trade and reduce their dependence on the US dollar.
In recent years, the global call for "dollarization" has been growing, and major economies, including developed countries and emerging market countries, have implemented the "dollarization" policy by innovating cross-border payment and settlement mechanisms, signing bilateral currency agreements, and promoting the diversification of foreign exchange reserves.
In order to bypass the SWIFT dollar settlement system, Europe launched the "trade support tool" (INSTEX) in early 2019. In March 2020, Europe and Iran reached the first barter trade under INSTEX settlement mechanism. At present, France, Germany, Britain, Belgium, Denmark, Finland, the Netherlands, Norway and Sweden have all joined the mechanism.
In January 2022, Turkey and the Central Bank of the United Arab Emirates signed a currency swap agreement worth 64 billion lira and 18 billion dirhams to promote bilateral trade in local currency. Last April, the Bank of Israel included Canadian dollar, Australian dollar, Japanese yen and RMB in its foreign exchange reserves for the first time. Previously, the country only held three currencies: the US dollar, the British pound and the euro. In July last year, the Iranian foreign exchange market launched the Iranian rial/Russian ruble currency transaction. Subsequently, Russia also indicated that it would gradually give up using the US dollar in its trade with Iran. In January this year, Saudi Arabia also expressed its openness to the settlement of trade in non-US dollars at the Davos Economic Forum.
As more and more countries consider "distancing themselves" from the US dollar, the proportion of global reserves of the US dollar is changing. According to the data of the International Monetary Fund, by the fourth quarter of 2022, the proportion of US dollars in global foreign exchange reserves had dropped to 58.4%, the lowest level since 1995.
The attractiveness of dollar assets has also declined. According to the data of the US Treasury Department, major overseas holders of US debt, such as China, Belgium, Luxemburg and France, have continuously reduced their holdings of US debt in the near future. According to the data of the Federal Reserve, in the week ending March 22nd, the US debt held by foreign investors decreased by $76 billion, which was the biggest weekly decline since March 2014. A report recently released by the US Treasury Department also shows that in January this year, at least 16 countries in the world sold US debt.
Multiple factors work together.
Many analysts pointed out that the indiscriminate application of financial sanctions by the United States is a direct factor in the acceleration of global "dollarization".
Paul craig roberts, former assistant treasury secretary, said recently that American hegemony has always depended on the status of the US dollar as a global reserve currency since World War II, and the recent financial sanctions in the United States have proved that the US dollar is no longer safe. The American magazine International Banker also reported a few days ago that the trend of "dollarization" around the world may not be so surprising, considering that about a quarter of the world’s population is directly affected by US financial sanctions.
Cui Jianjun, a professor at the School of Economics and Finance of Xi ‘an Jiaotong University, said in an interview with this reporter that since the Ukrainian crisis, some countries led by the United States have launched several rounds of financial sanctions against Russia. The most severe sanctions are two: First, freezing half of Russia’s foreign exchange reserves, totaling about 300 billion US dollars; The second is to kick major Russian banks out of the SWIFT settlement system. These "unjust actions" that seriously violate the rules of the free market economy and weaponize the US dollar have caused panic in various countries and become the fuse of the current global wave of "dollarization".
The irresponsible monetary policy of the United States has also forced many countries to explore countermeasures. Cui Jianjun said that since March last year, the Federal Reserve ended its loose monetary policy and turned to a radical interest rate hike policy, which caused turmoil in the international financial market. Many developing countries suffer from severe inflation and face devaluation of their currencies and capital outflows. Reducing the holdings of US dollar treasury bonds and promoting the diversification of foreign exchange reserve assets are actually helpless self-help measures for these countries to cope with the spillover of US financial risks.
"The United States manipulates the dollar to harvest the world and constantly consumes the credit base of the dollar." Cui Jianjun said, "Over the years, the United States has used the dominant monopoly position of the US dollar as both the sovereign currency of the United States and the international reserve currency to seek economic benefits and political advantages through the hegemony of the US dollar, which has seriously overdrawn the credit of the US dollar and prompted more and more countries to start ‘ De-dollarization ’ Explore. "
Guo Hongyu, a professor at the School of Finance of the University of International Business and Economics, said in an interview with this reporter that in addition to external factors, the internal needs of the development of emerging market countries have also promoted countries to actively explore the establishment of local currency trading mechanisms.
“‘ De-dollarization ’ In line with the development trend of multipolarization in the world. At present, emerging market countries are rising day by day, and their willingness to expand multilateral and regional trade cooperation is rising. In this process, there is bound to be a demand for cross-border payment and settlement mechanisms within their own countries and regions. With the further growth of foreign trade volume and payment and settlement demand in these countries, the financial infrastructure based on domestic currency payment will also accelerate the pace of construction. " Guo Hongyu said, "In addition, for economies with close intra-regional trade and high complementarity, using local currency for settlement has natural advantages. The use of local currency settlement can not only save the exchange cost of third-party currencies, avoid the impact of exchange rate fluctuations of third-party currencies on trade, but also help to reduce uncontrollable factors such as fluctuations in the number of third-party currencies. This is one of the main reasons why many countries are willing to negotiate a bilateral monetary agreement. "
Exploring and speeding up currency diversification
With the trend of "de-dollarization" becoming more and more obvious, some people think that dollar hegemony is coming to an end. John kani, an American economist, recently warned that the dollar may soon lose its "power" and its dominant position is weakening. The American "Business Insider" magazine also issued a document saying that the dominance of the US dollar in global trade faces "great challenges".
However, more analysts believe that it is too early to "challenge the dollar" at present, and the process of "dollarization" still needs to be viewed objectively.
Carson Group, an American investment institution, recently analyzed that the dominant position of the US dollar as the world reserve currency will not change in a short time, especially in the absence of a strong alternative.
"At present, the US dollar still ranks first in global trade settlement, foreign exchange reserves of central banks, global debt pricing and global capital flows. Although the status of the US dollar in the global monetary system has continued to decline in recent years, its status as a world reserve currency may be difficult to be quickly replaced. " Cui Jianjun said.
"At present, the US dollar still firmly occupies the two cornerstones of oil and gold, and the global market still has a strong path dependence on the US dollar in international trade settlement, cross-border payment and financing." Guo Hongyu said.
But at the same time, some new explorations cannot be ignored. A few days ago, Goldman Sachs said in a research report to its clients that the rise of crypto-digital currency has prompted global central banks to try to use digital currency to achieve de-centralization.
As early as May 2020, the Swedish central bank announced that it would use digital cryptocurrency anchored in its own currency to support financial settlement, and support dollar decentralization with blockchain technology. In February last year, the Russian central bank also announced the start of testing the digital ruble. Last May, the Bank of Japan issued a report saying that Japan’s digital currency Plan had entered the second testing stage. In addition, Japan’s Ministry of Finance and the Financial Services Department, together with several big banks, plan to lead the establishment of an international settlement system similar to SWIFT. Last November, the Bank of Egypt said that the Egyptian pound would soon be decoupled from the US dollar, and at the same time, a series of monetary policy reforms were initiated in order to "de-dollarize" the foreign exchange field.
"A multipolar monetary world may come sooner than expected." Gilian Tate, a columnist of the Financial Times, wrote a few days ago. Credit Suisse said in a report in February this year that there is evidence that the world’s major central banks are diversifying their investments and reducing their dependence on the US dollar. The world is gradually moving towards a more multipolar monetary system.
"In the future, the diversification of the international monetary system depends on the balanced development of the global economy. One possible prospect is that the US dollar continues to play a role as an international reserve currency, but its weight continues to decline; The status of the euro has gradually increased with the EU’s promotion of economic and financial autonomy; With the further rise of economic strength, Asian countries are gradually exploring the establishment of a new monetary order and contributing to the diversification of the international monetary system. " Cui Jianjun said.
"The development of money is closely related to trade." Guo Hongyu said, "A strong trade union will inevitably generate the internal demand for monetary cooperation. In this regard, the euro zone is a typical representative. The birth of the euro has provided monetary convenience for the regional trade of the member countries of the euro zone and promoted the development of international trade. Nowadays, the euro with real currency has become an advanced form of regional monetary cooperation and the second largest reserve currency in the world. At present, in addition to the euro zone, economic development and trade cooperation in Southeast Asia, Latin America and other regions are also constantly advancing. In the future, with the in-depth development of world multipolarization and economic globalization, it is not excluded that some new monetary cooperation arrangements may arise in these regions. "
关于作者