The current so-called "de-dollarization" trend, although it has received support from many countries and regions, the country that can really "de-dollarize" effectively lest it is still the US. .
“De-dollarization” despite being a long process over the past 20 years, has led to a decrease in the proportion of global reserves in USD. But so far, the US currency still holds the largest share in the market and there is currently no competitor capable of "surpassing".
De-dollarization is a strategy used by countries to challenge the dominant position of the USD. In the post-Covid-19 period, fluctuating foreign exchange reserves and the global crisis continue to be one of the major factors driving the current strong non-USD process. In addition, geopolitical competition and declining confidence in the USD are also contributing factors to this process at the moment.
The US dollar payment market share now accounts for 41,74% globally, having more than halved from 85,7% at its peak, according to the latest statistical data on global payments in March 3. , published by the Society for International Financial and Interbank Telecommunication (SWIFT).
 |
| De-dollarization accelerates globally… The US is behind 'pushing the boat'. (Source: The Economist) |
Total global foreign currency reserves announced by the International Monetary Fund (IMF) in April was 12.000 trillion USD, of which the dollar accounted for 58,36%, recording a new low in recent decades, decreasing by about 27% from the peak.
Still no rival?
The unilateral actions of the US administration regarding the dollar have exacerbated the current dollar crisis in the global market. With 10 consecutive interest rate hikes, since March 3, the US has caused the exchange rate to rise, affecting USD users around the world.
It seems that “de-dollarization” is accelerating on a global scale?
"De-dollarization" has recently become a frequently mentioned phrase in the international community and also seems to have become a trend, many countries consider the goal of reducing dependence on the dollar as a good way to get rid of difficulties. difficult to deal with the crisis.
This list seems to be getting longer and longer, from Asia, through the Americas, and then the Middle East, including Brazil, Venezuela, India, Indonesia, Malaysia, Ghana, Russia, France, Australia and China...
One issue the world should remember, however, is that the position and even dominance of the US dollar has been a matter of demand and consensus, and one of the core structures of the global system in which the community operates. international community to protect after World War II.
The current so-called "de-USDization" trend, although it has received support from many countries and regions, but the country that can really "de-dollarize" effectively, lest there is still only the US.
The creation of currency is always associated with power and responsibility, so is the sovereign currency of a country and the international currency of global circulation.
For a quarter of a century after the end of World War II, the dollar enjoyed all the benefits of being an international currency. However, by the time the administration of former President Richard Nixon, Washington had discovered that they had to pay a higher price for shouldering the responsibility, so they decided to abandon the Bretton Woods system decisively.
The US Treasury Secretary at the time was John Bowden Connally Jr. also left a famous saying for the world: "USD is our currency, but your problem".
Therefore, in fact, starting from that time the US always did some "de-dollarization", although they may not be aware of it, the concept of "turning the USD into another country's problem" is clear. apparently led to this result.
They want to enjoy the benefits of dollar domination, but don't want to shoulder the responsibilities required of an international currency.
US dollar but another country's problem
The sovereign currency of a country wants to become an international currency, it is necessary to implement the most stringent fiscal and monetary policy, maintain the balance of payments in the country and the stability of the exchange rate, win the trust and respect of the international community, it can help the currency to be more widely recognized and used.
However, starting in the 1970s, the US budget deficit gradually increased year by year, the federal government debt ceiling increased from several tens of billions of dollars to 31.400 trillion dollars in June 6 – the time when the government The US government and Congress are having a difficult time negotiating over the public debt ceiling. However, such negotiations seem to take place in every administration, in every US president.
The essence of the debt ceiling is fiscal discipline, many times exceeding the ceiling is default or irresponsible debt transfer. At this time, the task of maintaining the stability of the exchange rate has turned into tying other countries' currencies to the US dollar, letting other countries bear the consequences of the US's "overstretching hand" - This is direct damage. to the international status of the US dollar.
The international currency needs to be able to maintain price stability for strategic commodities and not weaken significantly due to changes in the situation, so that the international community can safely hold and circulate it.
To a very large extent, the dollar's dominant position in history has been determined by the petro-dollar. When the whole world only holds USD to buy oil, USD is the most important international circulation currency. Although so far the petro-dollar still dominates the international strategic commodity market, the weakening trend is evident.
Starting with the oil crisis in the Middle East in 1973, oil-producing nations sought to challenge the dominance of the Petro-dollar. Up to now, many countries have begun to use local currencies to pay for energy, resources and important goods such as oil, natural gas, food, etc.
Perhaps more and more goods in the world will use other currencies for payment, so the position of USD may continue to weaken.
The country supplying the international currency must also unite more allies, carefully use sanctions, take the lead in bearing the consequences of the financial and international crisis to receive the support of the day. the more countries, protect the long-term value of the international currency.
However, at the outbreak of the 2008 financial crisis, the massive quantitative easing policy of the world's largest economy dragged the world into a wave of the US subprime mortgage crisis.
The outbreak of the disease in recent years and the Russian-Ukrainian conflict have caused the global economy to falter. However, besides enticing the world to punish Russia, the US continuously raised interest rates, enacted the "Inflation Reduction Act", strongly attracted global capital flows to the US, disrupting the global economic recovery step. , including allied countries.
Those moves have seriously damaged confidence in the dollar, so "de-dollarization" has become such a big trend today.
It is difficult to distinguish the advantages and disadvantages of the international status of the US dollar, as long as the US remains a responsible global power, other countries cannot shake the position of the greenback.
However, now the US is using many of its measures to support the process of global "de-dollarization". Although the outcome of this process is still unknown, luck is equally unpredictable, but it seems that the US is the main force of "de-dollarization".
