Countries increasingly push for de-dollarization
An image of depicting the U.S. one dollar bill. /CFP
An image of depicting the U.S. one dollar bill. /CFP

An image of depicting the U.S. one dollar bill. /CFP

The U.S. dollar's preeminence has periodically been called into question, and recently, more countries have been shifting to other currencies in moves that could prove long-lasting.

Recently, RT reported that the U.S. dollar and euro make up less than half of Russia's export settlements as of January, citing official data.

India's oil trade, in response to the turmoil of U.S.-led international sanctions on Russia, provides the strongest evidence of a shift away from the dollar that could prove lasting. Paying for oil in dollars has been a nearly-universal practice for decades. India is the world's number three importer of oil, and Russia became its leading supplier after the Russia-Ukraine conflict began.

Indian customers have paid for most Russian oil in non-dollar currencies since December 5 last year, including the United Arab Emirates dirham and more recently the Russian ruble, multiple oil trading and banking sources told Reuters.

Separately, Russian President Vladimir Putin said in September that Moscow had agreed to sell gas supplies to China in yuan and rubles instead of in dollars.

IMF Deputy Managing Director Gita Gopinath said in the month after the Russia-Ukraine conflict started that sanctions on Russia could erode the dollar's dominance by encouraging smaller trading blocs using other currencies.

Last week, Southeast Asian countries agreed to reinforce the use of local currencies in the region and reduce reliance on major international currencies in an effort to avoid spillover from the global crisis, at a meeting of finance ministers and central bank governors of the Association of Southeast Asian Nations (ASEAN).

The move reflects the de-dollarization process going on in several parts of the world, said David E. Sumual, chief economist of Indonesia's Bank Central Asia, the largest privately-owned bank in the country.

"The trade and investment relations have changed fundamentally, yet the global monetary architecture remains practically the same," Sumual said, adding that the de-dollarization process has started not only in Southeast Asia but also in Latin America and the Middle East.

He said that sudden policy changes in the U.S. and other central banks "always" caused volatility in the region, so ASEAN countries hope to use more local currencies to promote economic stability and reduce spillover effects like high inflation.

(With input from Reuters, Xinhua)

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