2023-08-28 11:51:45
According to data from the SWIFT system, the dominance of the US dollar in global payments continued to strengthen. The proportion of SWIFT foreign currency payments in US dollars rose to a record 46% in July. In addition, the proportion of transactions involving Chinese yuan also increased. The dominance of the US dollar is indicated by SWIFT data According to the latest data from the Society for International Interbank Financial Telecommunications (SWIFT), the US dollar set a record in international payments. SWIFT’s messaging platform, products and services connect more than 11,000 banks and securities institutions, money market servers and other corporate clients in more than 200 countries. The company compiles around 200 million foreign exchange confirmations every year. The data shows that the proportion of SWIFT foreign exchange transactions conducted in US dollars reached 46%, which is a new record compared to the one-third proportion a decade ago, reports Bloomberg. The growth was largely at the expense of the euro, which reached its highest value in 2012, also at 46%. Parallel to the dollar’s record, the euro set a negative record with its lowest ever trading share of 25%. source: statista.com The most traded currency has been the dollar for decades. In 2022, more than 88% of FOREX transactions were conducted in the currency of the USA, and in addition, the dollar accounts for 58% of global foreign exchange reserves. According to SWIFT data, transactions in Chinese yuan show an increasing trend. In July, 3% of transactions sent through the company were in Chinese yuan, which is also a big increase compared to 2010’s rate of around 0.03%. Global dominance is undisputed, but many countries are trying to reduce their dependence on the dominant currency. This is also shown by the strengthening of the yuan. A blow to the anti-dollar countries Many economists, including the Nobel laureate Paul Krugman, have warned that the dominance of the US dollar will not last forever. However, most do not see the Chinese yuan as a serious threat to the dollar’s hegemony, at least in the near term. 15th BRICS Summit in Johannesburg. Source: flickr.com The anti-dollar trend seems unbroken and more and more countries are leaving behind the hegemonic dollar in favor of the Chinese yuan or other currencies. The BRICS countries (Brazil, Russia, India, India, China and South Africa) are at the forefront of efforts to de-dollarize. The economic bloc concluded its 15th annual summit this week, with BRICS leaders agreeing to encourage the use of alternative currencies in international trade and financial transactions. The agreement is certainly shared by several people, as the economic bloc will be expanded by 6 more countries from 2024. In addition, more than 40 countries have expressed their interest, of which 23 countries have already submitted their applications. There is an initiative, but we still have to wait for the real result. There is a basic agreement between the BRICS countries on the opposition to the dollar, but elaborated plans, initiatives or even the realization of a common currency are still a long way off. Following Moscow’s invasion of Ukraine, China, Russia and India stepped up their long-standing anti-dollar campaign, especially following Western sanctions barred several Russian banks from SWIFT and froze $330 billion in Russian reserves. However, the campaign does not yet have a threatening effect on the US dollar, especially if we consider the July data. Hardeep Singh Puri, India’s Petroleum and Natural Gas Minister, recently stated that de-dollarization is still a long way off as the US currency remains a stable leader in global trade. The minister emphasized that despite the high use of the Indian rupee, the Russian ruble, and the Chinese yuan in some sectors, such as oil transactions, they do not at all question the position of the prevailing dollar. Despite the realistic realizations, the representatives of the BIRCS countries are ambitious. Despite the obstacles, they repeatedly defied the expectations of the West, and their determination should not be disputed. Thus, the dollar may still be the dominant currency of the coming decade, but the challenges to it will continue to grow. Published on the BitcoinBázis page.
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