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22-05-2023, 09:13 PM
Iraq has just banned US-dollar transactions, the Saudis and Emiratis plan to sell oil without it, and there are plans to establish a whole new currency to bypass it. To know why, first have a look at the war in Ukraine.
In Iraq, US authorities had been making it harder to get dollars into the country — they were apparently worried that too much American cash was being smuggled to the neighboring Iranian government, which is under sanctions, but is tacitly supported by many Iraqi politicians. This shortage of dollars has led to volatility in the value of the Iraqi dinar, which is pegged to the US currency.
Earlier this year, Saudi Arabia's finance minister said his country was also "open" to selling oil using different currencies, including the euro and the Chinese yuan. The United Arab Emirates has said it will work with India, using the Indian rupee. Last year, Egypt announced plans to issue bonds — financial securities that help governments raise money — in Chinese yuan. It had already issued bonds in Japanese yen.
Additionally, several Middle Eastern nations — Egypt, Saudi Arabia, the UAE, Algeria and Bahrain — have said they want to join the geopolitical bloc known as BRICS, an acronym for Brazil, Russia, India, China and South Africa.
Since 2021, the UAE has also been part of a pilot project run by the Switzerland-based Bank for International Settlements, a kind of central bank for central banks. This project looks at digital, cross-border payments that might bypass the dollar. Other participants are Thailand, Hong Kong and China.
McDowell doesn't rule out the possibility that the dollar's dominance will one day fade. "All empires eventually collapse," he quipped.
The fact that the US and Europe froze Russian central bank reserve assets held in their jurisdictions has also weaponized central banks and possibly damaged the international financial system, according to Demertzis.
This is why countries in the Middle East "are preparing for a more multipolar global world, where they will want to be best placed to act inside and outside of dollarized zones.
https://www.dw.com/en/why-the-dollars-do...a-65662358
In Iraq, US authorities had been making it harder to get dollars into the country — they were apparently worried that too much American cash was being smuggled to the neighboring Iranian government, which is under sanctions, but is tacitly supported by many Iraqi politicians. This shortage of dollars has led to volatility in the value of the Iraqi dinar, which is pegged to the US currency.
Earlier this year, Saudi Arabia's finance minister said his country was also "open" to selling oil using different currencies, including the euro and the Chinese yuan. The United Arab Emirates has said it will work with India, using the Indian rupee. Last year, Egypt announced plans to issue bonds — financial securities that help governments raise money — in Chinese yuan. It had already issued bonds in Japanese yen.
Additionally, several Middle Eastern nations — Egypt, Saudi Arabia, the UAE, Algeria and Bahrain — have said they want to join the geopolitical bloc known as BRICS, an acronym for Brazil, Russia, India, China and South Africa.
Since 2021, the UAE has also been part of a pilot project run by the Switzerland-based Bank for International Settlements, a kind of central bank for central banks. This project looks at digital, cross-border payments that might bypass the dollar. Other participants are Thailand, Hong Kong and China.
McDowell doesn't rule out the possibility that the dollar's dominance will one day fade. "All empires eventually collapse," he quipped.
The fact that the US and Europe froze Russian central bank reserve assets held in their jurisdictions has also weaponized central banks and possibly damaged the international financial system, according to Demertzis.
This is why countries in the Middle East "are preparing for a more multipolar global world, where they will want to be best placed to act inside and outside of dollarized zones.
https://www.dw.com/en/why-the-dollars-do...a-65662358
