De-dollarization

[Vikrant]

Russia and China just came to a currency agreement in their attempt to reduce dependence on the dollar.

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A recent agreement between Russia and China to switch to domestic currencies in bilateral trading will pave the way for the “de-dollarization” of the global economy, a Finnish political economist says.

Russia and China are set to use their own currencies in trading to reduce the influence of the US dollar in response to the latest round of US sanctions against Moscow over the Ukraine crisis.

On December 29, an agreement signed at the end of October came into effect which would allow a currency swap of CNY150 billion (up to 25 billion USD) between the two countries.

This currency agreement is a “very significant development and it will be a boost for the Russian economy,” Jon Hellevig told Press TV on Wednesday.

“It means a strong move towards the de-dollarization of the economy, not only Russia and China’s economy, but the whole global economy,” he added.

The US economy will lose its strongest advantage, which is printing US dollars due to this currency swap because the Federal Reserve will have to raise interest rates and that will cause the US stock market to collapse, Hellevig warned.

Moscow has been witnessing a decline in the value of its currency, which is going through its worst crisis since 1998 due to Western embargoes, dropping oil prices and trade fears.

Russia has been hit with a series of sanctions by the US and the European Union that have accused Moscow of playing a role in the ongoing crisis in eastern Ukraine, a claim Russia has repeatedly rejected.

PressTV

 

[Toro]

About a quarter of all world trade is already done in currencies other than dollars, which has been the case for many years.

 

[Statistikhengst]

Yepp.

 

[Toro]

Russia's problem is that it has decided to go toe-to-toe with the West, and is vulnerable to financial sanctions. So they are trying to diversify away that risk.

 

[EdwardBaiamonte]

The US economy will lose its strongest advantage, printing dollars

total illiterate liberal BS
The US's strength is capitalism. Printing money does not make a country stronger or weaker. This is Econ 101 class one day one.

 

[Kimura]

Russia's problem is that it has decided to go toe-to-toe with the West, and is vulnerable to financial sanctions. So they are trying to diversify away that risk.

By the way, if a Russian bank cannot obtain US Dollars, they shouldn't offer accounts that are denominated in US Dollars. It's not the job of the Russian central bank to provide accounts or liquidity in US Dollars. In the event they cannot obtain the needed liquidity from the US clearing system, these accounts should be simply closed by the Russian central bank. If people in Russia need USD liquidity, they should purchase it with Rubles in the market like the rest of us.