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20-04-2023, 08:20 AM
Anna Golubova
Wednesday April 19, 2023 16:55
(Kitco News) Markets need to pay closer attention to the de-dollarization trend since the greenback is losing its power as a reserve currency faster than many analysts are noticing, according to Stephen Jen, CEO and co-CIO of Eurizon SLJ Capital.
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"The dollar suffered a stunning collapse in 2022 in its market share as a reserve currency, presumably due to its muscular use of sanctions," Jen wrote. "Exceptional actions taken by the U.S. and its allies against Russia have startled large reserve-holding countries, most of which are from the Global South."
According to Jen's calculations, the greenback's share of official global reserve currencies dropped from 73% in 2001 to about 55% in 2021. And in 2022, it tumbled to 47% of total global reserves.
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"If the financial markets outside the U.S. could thrive (growing in size and becoming ever more energetic, without being unstable), and if the opposite happens in the U.S., the dollar could very well meet its demise. This is, however, not an imminent risk, in our opinion, though the trends are heading in that direction," Jen described.
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"If the U.S. makes more policy errors and abandons the culture of self-examination, there will likely come a time when much of the rest of the world will actively avoid using the dollar," Jen wrote. "While the Global South is unable to totally avoid using the dollar, much of it has already become unwilling to do so."
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The yuan is already the most traded currency in Russia
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China and Malaysia are discussing the creation of an Asian Monetary Fund to reduce reliance on the U.S. dollar, while India and Malaysia announced that they abandoned trading in U.S. dollars and can now settle in Indian Rupees.
......
central banks have been flocking to gold as a preferred reserve asset, buying record amounts in 2022.
https://www.kitco.com/news/2023-04-19/US...s-Jen.html
Wednesday April 19, 2023 16:55
(Kitco News) Markets need to pay closer attention to the de-dollarization trend since the greenback is losing its power as a reserve currency faster than many analysts are noticing, according to Stephen Jen, CEO and co-CIO of Eurizon SLJ Capital.
......
"The dollar suffered a stunning collapse in 2022 in its market share as a reserve currency, presumably due to its muscular use of sanctions," Jen wrote. "Exceptional actions taken by the U.S. and its allies against Russia have startled large reserve-holding countries, most of which are from the Global South."
According to Jen's calculations, the greenback's share of official global reserve currencies dropped from 73% in 2001 to about 55% in 2021. And in 2022, it tumbled to 47% of total global reserves.
......
"If the financial markets outside the U.S. could thrive (growing in size and becoming ever more energetic, without being unstable), and if the opposite happens in the U.S., the dollar could very well meet its demise. This is, however, not an imminent risk, in our opinion, though the trends are heading in that direction," Jen described.
......
"If the U.S. makes more policy errors and abandons the culture of self-examination, there will likely come a time when much of the rest of the world will actively avoid using the dollar," Jen wrote. "While the Global South is unable to totally avoid using the dollar, much of it has already become unwilling to do so."
......
The yuan is already the most traded currency in Russia
......
China and Malaysia are discussing the creation of an Asian Monetary Fund to reduce reliance on the U.S. dollar, while India and Malaysia announced that they abandoned trading in U.S. dollars and can now settle in Indian Rupees.
......
central banks have been flocking to gold as a preferred reserve asset, buying record amounts in 2022.
https://www.kitco.com/news/2023-04-19/US...s-Jen.html
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