2023-05-12 22:37:49
French.china.org.cn | Updated on 13-05-2023
The possibility of the U.S. dollar losing its role as the world’s reserve currency has rightly been garnering a lot of attention lately, and investors should take heed of it, The Globe and Mail reported on Tuesday.
According to the newspaper, “this fear has been caused by the cultural and economic challenges that the United States seems to be facing. China, Russia, India and Brazil are actively seeking to reduce the dominance of the greenback in international finance. “.
“The weakening of the US dollar’s position in global capital markets is due to the United States itself,” the article said.
For the Globe and Mail, this weakening of the American currency has been caused by decades of fiscal irresponsibility and anemic economic growth which has been concealed by artificially low interest rates and by the fact that the United States, controlling the world’s reserve currency and the main international medium of exchange, have lowered the cost of borrowing. Furthermore, the US administration has chosen to weaponize the dollar, most recently by expelling Russia from the international payment system and confiscating its assets.
“Confidence in the United States and its currency has not been lost, but it has deteriorated severely over time as the country’s debt levels soared and its interest rates fell thanks to quantitative easing policies,” the article noted.
However, the US dollar will remain a reserve currency for some time to come. Its decline has been and will continue to be gradual, and investors should look abroad to diversify their investment opportunities, the newspaper concluded.
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