Selling tide flushing the foundation of the US dollar hegemony

Editor's words: Are we witnessing the great changes in the international monetary system and the global financial pattern? Many countries have recently sold U.S. bonds in large numbers. Russia, India and other actively build a non -US dollar settlement system, and Israel has promoted more diversified foreign exchange reserves -under the influence of the Fed's radical interest rate hikes and the outbreak of the Russian and Ukraine military conflict, The actions of de -US dollarization of the United States have continued to accelerate. "Are we witnessing the beginning of the global US dollar?" This is a question raised by many media. Rogov at Harvard University of Economics predicts that the dominant position of the US dollar in the global financial system is likely to end in 20 years.

On July 27, the Fed announced that it was 75 basis points for interest rate hikes, which is the fourth rate hike of the agency this year. The Federal Reserve has repeatedly raised interest rates this year, exacerbating developing countries with heavy debt and other debt in Sri Lanka. The risk of the global market shock in the global market, and the outbreak of the Russian -Ukraine conflict, the United States' "weaponization" and sanctioning Russia in the United States made countries deeply feel cold and welcomed by the US dollar.

Integrated tide of US dollars in selling

One of the performances of the acceleration of the US dollar operations of various countries is to sell US debt in large quantities. According to foreign media statistics, the global US bond reserve has continued to decline in the past two years, and has fallen to the lowest level after June this year. In May of this year, overseas official institutions such as central banks and sovereignty wealth funds around the world sold the size of US $ 34.1 billion in US bonds, refreshing the largest monthly selling scale since the outbreak of the new US crown pneumonia.

As the largest holding country of U.S. debt, Japan has reduced its holdings for 3 consecutive months. The US debt held in May fell to US $ 12128 trillion, a decrease of $ 5.7 billion month -on -month. As the second largest overseas debt country in the United States, China's US debt held in May to US $ 980.8 billion, a decrease of US $ 22.6 billion month -on -month, the first time since May 2010, less than $ 1 trillion. In addition, Ireland, which holds the seventh position in the US debt and Canada, 12th in May, reduced its holdings of US $ 20.3 billion and $ 9.4 billion in May, respectively.

Among some countries' foreign exchange reserves currency, the proportion of the US dollar has also decreased. The "COFER) report released by the International Monetary Fund (IMF) recently announced that in the fourth quarter of 2021, the market share of the US dollar in the global central bank's international reserve decreased from 59.15%in the previous quarter to 58.81 %, A new low in 26 years. In addition, since this year, the United States allies Israel include yen and other foreign exchange reserve currencies. Earlier, Israel's foreign exchange reserve currency was only US dollar, euro, and pound.

Multi -countries use their domestic currencies for international trade settlement

After the outbreak of Russia and Ukraine, the United States frozen hundreds of billions of dollars in Russia's reserve assets. Russia, which has been hit, and other countries who are worried about being sanctioned by the United States, jointly promote the use of non -US dollars for international trade settlement. On July 26, the Iranian Economic Minister said that it has been confirmed that it will no longer use US dollar transactions in economic and commercial trade between Iran and Russia. India has also negotiated with Russia to bypass the US dollar and promote the use of rupees and rubles for trade settlement. According to the US "Congress" report, after the US sanction of Russia, many countries have doubts about the continued use of US dollars for international trade settlement, including BRICS countries, and these countries' GDP (GDP) accounted for 24 globally. %above.

Some international organizations also plan to promote currency settlement in countries in the region. Gruzjev, deputy minister of the Ministry of Industry and Trade of Russia, said recently that the financial departments of the SCO countries are reaching an agreement on gradually increasing the share chart of their currencies in mutual settlement. Former Brazil President Lula, who aimed at the October election this year, recently said that he hopes to create a digital currency "Sur" in Latin America, "because we cannot continue to rely on the US dollar."

Looking for SWIFT substitution system

After the outbreak of the Russian and Ukraine conflict, in order to destroy the Russian economy, Western countries such as the United States kicked Moscow out of the Global Bank of Financial Communications Association (SWIFT) payment system, which further accelerated Russia's action to replace the SWIFT system.

The Russian satellite news agency said on July 27 that Russia and Iran are establishing a joint bank payment system. Some senior Iranian officials said that Iraqi and Russia actually reached a "very good agreement", and on this basis, foreign exchange transactions between the two countries will be completed. Earlier, Russian presidential assistant Aleoshkin revealed that the Russian government plans to establish a foreign economic and trade system to pay for payment through the SWIFT system when conducting international trade. He said that Russia is currently conducting new mechanisms for consultation and development with countries such as Turkey. In fact, after Russia suffered Western sanctions in 2014, Russia was seeking to establish a SWIFT alternative system to launch a Russian financial information transmission system SPFS. As of June this year, 70 financial institutions from 12 countries have access to the SPFS system.

In addition to Russia and Iran, the Bank of India launched a new mechanism for international trade settlement with India and rupees on July 11, and announced that the mechanism took effect immediately. The five major ASEAN economies reached a consensus in July this year, and planned to establish a regional integration payment network in order to bypass the US dollar to conduct foreign exchange settlement directly. Cambodia's "Khmer Times" recently reported that after the US sanctions Russia, more than 20 countries have established an independent financial liquidation system, and bilateral or small multilateral payment and settlement systems are forming. Once the new payment settlement pattern is formed, the proportion of the US dollar in the international payment settlement will further decline. Decoration will be the main consideration for the selection of payment settlement channels in various countries, which will accelerate the reconstruction of the international monetary system and global financial order. "What speed will the US dollar lose its position, I can't be sure. But it is clear that the process of de -US dollar globalization has begun and cannot be stopped." Said Volokin, chairman of the Russian country Duma (lower courtyard). The former chief economist of Economics and International Monetary Fund (IMF) at Harvard University, Rogov, predicts that the dominant position of the US dollar is likely to end within 20 years.

Global Times Special Journalist Yingchen Global Times reporter Zhao Jueyi

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