ECB President Warns of U.S. Dollar’s Reserve Currency Status Amid De-Dollarization Trend
ECB President Christine Lagarde recently commented on the global de-dollarization trend, warning that the U.S. dollar’s reserve currency status should not be taken for granted. With new trade patterns emerging, there may be ramifications for international currency reserves and payments. Lagarde noted that China’s increasing bilateral trade with emerging markets has already led to a surge in renminbi holdings as reserves.
While the data do not show substantial changes in the use of international currencies, Lagarde urged vigilance and attention to the currency in which trade transactions are organized. As more countries use local currencies for trade settlements, the dominance of the USD may be challenged, and the emergence of new alliances could create opportunities for certain countries to reduce their dependence on Western payment systems and currency frameworks.
Clever Robot News Desk 27th April 2023