As more countries around the world look to lower their dependence on the United States financially, more and more countries have started to stop using the U.S. dollar in trade and overall. Places are looking to become more independent economically as there is major concern about a possible war with the U.S. with China and Russia, and the U.S. economy hasn't been on a very great track ever since the beginning of the [pandemic which leaves many countries worried. While this decrease in dollar usage is happening it certainly isn't being completely dropped as it is estimated that around three-fifths of exchange, reserves are in U.S. dollars.
One of the most notable events that have happened recently regarding the lack of usage of the U.S. dollar is Saudi Arabia's statement on oil. They have begun to look into new forms of payment for their oil outside of the U.S. dollar, something that hasn't been done in nearly half a century up till now. Saudi Arabia is one of the major capitals in the world for oil, making their possible departure from the dollar a huge deal economically for the U.S. Along with Saudi Arabia places like India, Singapore, and Brazil have been in talks individually to switch their usage of the U.S. dollar to a currency founded in their respective countries.
While the problem of the U.S. dollar being eliminated from other places around the world has been an issue for some years now it has never been taken to the extremes it has as of 2023. Ever since the Woods agreement of 1944 the U.S. dollar has been the leading currency by a landslide. This could all change as countries continue to reform and change which could be detrimental to the U.S. economy as a whole.
Besides trying to become more economically independent, and not trusting the US, I wonder why these countries are pulling away from using the US dollar. I think it'll be interesting to see what will happen in the future even if the threat of a possible war ceases.
ReplyDeleteIt is interesting that this storm of the pandemic and potential war was enough to drive many large countries away from the US dollar even when it has been such a stable and widely used currency for so long. If these countries follow through I am curious to see just how detrimental it is to the US economy.
ReplyDeleteWow, this is interesting to think about. Like Zach said, I wonder why they would choose to stray away even thought the US currency is used very widely, especially with trading in mind. I think that this would make things a lot more difficult. When do you think this will really begin to be put in place and start to change drastically?
ReplyDeleteThough I see your point that the US dollar usage is increasing. I think the US is to integrated in the world economy for the US dollar usage to go down to #2 on the currency list. It will be interesting to see tho what currency steps up and gets chosen as the main alternative.
ReplyDelete