Alternative Currencies Face Uphill Battle Against Dollar Dominance, Analyst Says
Market analyst Zain Vawda from Dailyfx highlights the growing challenges for alternative currencies like the Chinese yuan and Russian ruble to the U.S. dollar.
He points out that recent volatility in these currencies, along with the Argentine peso to a lesser extent, “will only add further challenges to the idea of de-dollarization.” Vawda emphasizes the difficulty in establishing trust in these currencies, given the U.S. dollar’s reputation for stability and liquidity since the gold standard era.
Vawda notes that these countries face an internal obstacle in pursuing de-dollarization, as they struggle to agree on a clear strategy apart from increasing trade in their respective currencies. This challenge becomes more significant as these nations continue to diversify their foreign exchange reserves while still holding a substantial amount of U.S. dollars.
This issue specifically resonates with the proposed BRICS currency, a topic that is likely to come up for discussion at the upcoming economic bloc summit. Despite efforts to shift away from the dollar, Vawda concludes that the struggle to find a common path to de-dollarization persists due to these complexities.
Clever Robot News Desk 23rd August 2023
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