In an exclusive interview with RIA Novosti on Monday, Aleksei Mozhin, the executive director for Russia at the International Monetary Fund (IMF), shed light on the escalating trend of de-dollarization worldwide. Mozhin emphasized that countries across the globe are increasingly seeking alternatives to the U.S. dollar due to the policies and actions pursued by the United States.
The IMF executive director highlighted the growing adoption of alternative currencies, particularly the Chinese yuan, in cross-border transactions. Notably, he pointed out that Iranians, Brazilians, and Saudis have already begun transitioning to conducting trade in yuan, not only with China but also with other nations.
Mozhin attributed the longstanding dominance of the U.S. dollar in the global economy to a lack of competition, as most international settlements and deposits are denominated in dollars. He also highlighted the concerns expressed by U.S. officials regarding the potential erosion of the dollar's reserve currency status.
Treasury Secretary Janet Yellen recently acknowledged the impact of financial sanctions on the U.S. dollar's dominance, while U.S. Senator Rand Paul warned about the diminishing hegemony of the USD, citing the country's foreign policy as a contributing factor.
The IMF official anticipates a gradual decline in the dominance of the U.S. dollar but acknowledged that the process will unfold over time. He stated, "It's clear that it will not happen at once, but the process has begun."
Russia, in particular, has been actively reducing its reliance on the U.S. dollar and the euro in foreign settlements, opting for alternative currencies. According to Russian Deputy Minister of Economic Development Vladimir Ilyichev, the share of the dollar and euro in Russia's international settlements plummeted from 90% in early 2022 to below 50% by the end of last year, and this trend is expected to persist.
Mozhin concluded that the widespread use of the U.S. dollar globally is misguided, considering the U.S. government's utilization of the currency to serve its national interests and economic obligations. He underscored that Washington's policies have compelled countries worldwide to search for viable alternatives to the dollar.
As more nations turn to alternative currencies in their cross-border transactions, with the Chinese yuan gaining prominence, the de-dollarization movement continues to gather momentum. The shift away from the U.S. dollar signifies a broader desire for a more diversified and multipolar international financial system.
