HONG KONG - Efforts by BRICS countries to create alternative currency channels are gradually weakening the dominance of the US dollar, Kashif Hasan Khan, head of the Department of Economics at Cambodia's Paragon International University, said in a column for the South China Morning Post.
"For many emerging economies, the United States is no longer a major trading or investment partner, but its currency continues to underpin their transactions. This contradiction has given a new sense of urgency to the BRICS group's efforts to find alternative currency channels," wrote the expert.
He believes that the desire of countries in the global South to find an alternative to the dollar is driven by the US using its currency "as an instrument of foreign policy," in particular through sanctions and control of the SWIFT system.
The author points out that the BRICS countries are already experimenting with a number of mechanisms to reduce their dependence on the dollar: lending in national currencies through the New Development Bank, trading with each other in rubles, yuan and rupees, and developing alternatives to SWIFT.
At the same time, however, the expert stresses that the dollar is unlikely to be dethroned anytime soon, as the US government bond market remains the most liquid in the world and the dollar is supported by "protecting the rule of law in American markets."
"A more realistic scenario is a multipolar monetary order rather than the emergence of a substitute currency," says the author.
Earlier, in an interview with a TASS correspondent, Wang Zibang, a senior researcher at China's Taihe Institute, expressed the view that the secondary sanctions imposed by Washington on China and India over purchases of Russian energy resources could undermine dollar hegemony and strengthen the BRICS.
According to him, if the US is prepared to completely sever trade and economic relations with China, "they should take into account that the very hegemony of the dollar is at stake." This, he said, could lead to accelerated internationalisation of the yuan and closer economic and financial cooperation within the BRICS countries.
gnews.cz - GH
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