Dedollarisation

Dedollarisation is a process of substituting US dollar as the currency used for:

  • Trading oil and/ or other commodities (see Pétrodollar)
  • Buying US dollars for the forex reserves
  • Bilateral trade agreements
  • Dollar-denominated assets

Since the establishment of Bretton Woods system, the US dollar is used as the medium for international trade. In recent years, several countries are transitioning to trade in national currencies. In September 2018, World Bank economists announced that the process of dedolarisation in the World has begun and can no longer be stopped[1].

Regional developments

Australia

In 2013, Australia made an agreement with China to trade in national currencies.[2]

Brazil

In 2013, during the BRICS summit, Brazil made an agreement with China to trade in Brazilian real and Chinese yuan[3]

China

Since 2011, China is gradually shifting from trade in US dollar and in favour of Chinese yuan.[2] It made agreements with Australia, Russia, Japan, Brazil, Iran to trade in national currencies.

Iran

China as well started buying oil in gold-backed yuans.[4]

Japan

In 2011, Japan made an agreement with China to trade in national currencies.[5] Sino-Japanese trade is currently worth ~US$300 billion.[6]

Russia

Lukoil, a state-owned company announced that it will find a replacement for dollar.[7]

Venezuela

In August 2018, Venezuela declared that it would price its oil in Euros, Yuan and other currencies.[8][9]

References

  1. ^“Dolar na cenzurowanym”. biznes.interia.pl (in Polish). Retrieved 2019-10-27.
  2. ^ Jump up to:ab “News”. australianbusiness.com.au. Retrieved 2019-10-26.
  3. ^“So Long, Yankees! China And Brazil Ditch US Dollar In Trade Deal Before BRICS Summit”. ibtimes.com. Retrieved 2019-10-26.
  4. ^“China Prepares Death Blow To The Dollar”. OilPrice.com. Retrieved 2019-10-26.
  5. ^“China, Japan to trade in own currencies”. UPI.com. Retrieved 2019-10-26.
  6. ^“OEC”. oec.world. Retrieved 2019-10-26.
  7. ^Gleb Gorodyankin. “Exclusive: Russian oil firm seeks dollar alternative amid U.S. sanctions threat – traders”. Reuters. Retrieved 2019-10-26.
  8. ^“US dollars no longer a quote currency in Venezuela”. Xinhua Net. 18 October 2018. Retrieved 19 October 2018.
  9. ^“Fintech is the new oil in the Middle East and North Africa”. Forbes. Retrieved 10 April 2019.

 

Ofer Abarbanel – Executive Profile

Ofer Abarbanel online library

Ofer Abarbanel online library

Ofer Abarbanel online library