Developing Countries Abandoning the US Dollar in Favor of Domestic Currency

Byadmin

Aug 12, 2024
Developing Countries Abandoning the US Dollar in Favor of Domestic CurrencyDeveloping Countries Abandoning the US Dollar in Favor of Domestic Currency

Central banks in many developing countries are increasingly diversifying their reserves towards gold and their own currencies, reducing reliance on the US dollar.

This shift is driven by concerns over the massive US national debt, which has reached $35 trillion. If the global market experiences a downturn or recession, it poses risks. BRICS countries, in particular, are actively reducing their dependence on the US dollar while strengthening their own currencies.

The share of the US dollar in global reserves has significantly declined. According to a report by the Atlantic Council, its share currently stands at 59% of global reserves, compared to 72% in 2002. Over the past 13 years, the US dollar’s share in global reserves has decreased by 3%, while the renminbi’s share has increased by XNUMX%.

In addition, the euro has also declined from 28% in 2019 to 20% in 2008.

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BRICS countries are pushing for the use of their own currencies in international trade, which puts additional pressure on the US dollar. If this de-dollarization trend continues, the future share of the US dollar in global reserves could fall below 50%, potentially leading to severe financial instability and market turmoil in the United States.

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