Skip to main content

Russia’s Yuan Shift: EBRD Economist Warns of Waning US Dollar Dominance

Russia's Yuan Shift: EBRD Economist Warns of Waning US Dollar Dominance

In a recent interview, the European Bank for Reconstruction and Development’s (EBRD) chief economist, Beata Javorcik, highlighted a notable trend: Russia’s growing inclination to transact in the Chinese yuan. This shift, the economist emphasized, could challenge the dominance of the U.S. dollar. “[The] increase in the usage of the Chinese currency is coming at the expense of the U.S. dollar,” Javorcik remarked on Wednesday.

EBRD Report, Chief Economist Beata Javorcik Emphasizes Russia’s Shift to Chinese Yuan

Beata Javorcik, the European Bank for Reconstruction and Development’s (EBRD) lead economist, touched on Russia’s increasing preference for the Chinese yuan in trade dealings. Her observations coincide with a period where the U.S. dollar’s stake in global reserves has slipped below 60%. Concurrently, Russia and numerous BRICS countries are veering away from leveraging the greenback in trade.

“You see that this increase in the usage of the Chinese currency is coming at the expense of the U.S. dollar,” Javorcik told Bloomberg on Wednesday. She further noted that sanctions have “given impetus to countries to think about diversifying invoicing currencies, and long-term this could erode the dominance of the dollar.”

Javorcik recently collaborated on a study highlighting the growing trend of countries adopting the Chinese yuan and forging swap lines and trade pacts with China’s central bank. China’s imports from Russia have recently skyrocketed, hitting a record peak. Speaking to Bloomberg, the economist mentioned that while new swap arrangements with the People’s Bank of China are emerging, many were in place before the conflict between Ukraine and Russia.

“Many of these swap lines, they predate the war,” Javorcik told the publication. “War has given impetus to using the Chinese yuan as a currency,” she added.

Javorcik’s perspective isn’t universally shared. Benn Steil, the economist and director of International Economics at the Council on Foreign Relations, opined in August that the Chinese currency is “not a serious threat to dollar hegemony.” However, in September, Alexander Wise, a strategic analyst at JPMorgan, highlighted potential threats to the U.S. dollar, outlining two specific scenarios in a company report.

Concurrently, Jahangir Aziz, an economist with JPMorgan, observed in the same study that the “importance of the dollar has declined significantly from 2014 to 2022.” In the report jointly penned by Javorcik and EBRD economist Maxim Chupilkin, they explain that while the greenback’s global dominance aids in imposing sanctions on Russia, it’s a double-edged sword.

“The dominance of the U.S. dollar makes international sanctions more effective, as firms engaged in international trade overwhelmingly require payments to be cleared through the U.S. banking system,” the authors wrote. “At the same time, the use of economic sanctions may over time reduce [the] attractiveness of the U.S. dollar as a vehicle currency and hence its dominance.”

What do you think about the EBRD economists’ opinions about the U.S. dollar becoming less attractive in trade? Share your thoughts and opinions about this subject in the comments section below.



from Bitcoin News https://ift.tt/uP9boyt

Comments

Popular posts from this blog

Wallet Bot on Telegram Adds Bitcoin Support to Web Interface Following Tether Integration 

Telegram users can now buy, sell, and send bitcoin, as the leading cryptocurrency has been integrated into the Wallet bot on the popular messaging application. The bitcoin support follows the wallet’s recent tether integration, which enables users to transact with the stablecoin as well. Over a Billion Telegram Users Can Now Transfer Bitcoin in Chats On Friday, April 21, the @wallet bot on Telegram announced the addition of bitcoin (BTC) support to its web interface. The development team explained that previously, the leading cryptocurrency by market capitalization was only accessible in the text bot. “Now, all @wallet users will be able to take full advantage of our web interface,” the announcement on Telegram details. Telegram is extremely popular among cryptocurrency users, and according to a report from April 2023, the messaging app has an estimated 1.068 billion users. Bitcoin.com News confirmed that BTC has been added, as our publication tested the @wallet bot on Telegram...

Bitcoin ETFs Snap 10-Day Streak: $93M Flees as Fidelity’s FBTC Takes the Hit

Data compiled Friday revealed a striking reversal for spot bitcoin exchange-traded funds, which snapped a ten-session inflow streak with a $93.16 million exodus—marking their first day of negative movement. Bitcoin ETFs Drain While Ether ETFs Gain The abrupt shift punctuated a previously unbroken stretch of positive momentum for U.S. bitcoin ETFs, culminating in a $93.16 […] from Bitcoin News https://ift.tt/Q1xgKWA

US-Listed Bitcoin Miners Hit Record Market Cap of $22.8 Billion, JPMorgan Says

As of June 15, U.S.-listed bitcoin miners have reached a record market capitalization of $22.8 billion, according to global investment bank JPMorgan. This surge is led by significant gains in stocks like Core Scientific, Terawulf, and Iren. The overall sector market cap has increased by 24% since the end of May, partly due to a […] from Bitcoin News https://ift.tt/E8R7P09