Huitong Finance APP News--
On Tuesday (May 21), Business Insider reported that commodities expert Jeffrey Christian said de-dollarization was a "bad joke" and that no one was actually selling dollars.
Christian, chief commodities analyst and founder of CPM Group, pointed out that there is growing concern that the US dollar may soon replace the dominant currency in global financial markets.
More countries, including Russia, China and other BRICS countries, have expressed interest in moving away from dollar-based trade. However, Christian said the idea of anyone giving up the dollar largely does not align with reality.
"It's a joke, meaningless and very lasting. Terribly lasting. No one is selling dollars,"Christian said of de-dollarization in a recent speech.
Market commentators have been warning that the global economy will take concerted action to de-dollarize, pointing to declining use of the dollar in world trade and as a central bank reserve currency.
But Christian said when talking about international trade data that the decline was not as severe as some people thought. According to the Bank for International Settlements, as of April 2022, the US dollar accounted for 88% of all daily currency transactions.
Christian pointed out that central banks have not given up on the dollar either. International Monetary Fund data shows that the US dollar still accounted for 54% of all foreign exchange reserves in the fourth quarter of 2023, slightly lower than 54% in the fourth quarter of 2021rainbowtrout.8%。
US dollar holdings still significantly exceed other foreign currencies. By 2022, its closest competitor, the euro, will account for only 19% of the central bank's total reserves, down from about 29% decades ago.
"Central banks have diversified foreign exchange holdings, but not at the expense of the dollar, nor away from the dollar," Christian said.
At the same time, the U.S. dollar has also appreciated over the past decade, which in itself indicates demand for the currency. The U.S. Dollar Index, which measures the weight of the U.S. dollar against a basket of foreign currencies, has risen nearly 40% since bottoming out in 2011.
"Obviously, people are buying a lot more dollars than they are selling," Christian said. "De-dollarization is a myth, a joke, and a bunch of nonsense, no matter howrainbowtroutWhat do you call it, butrainbowtroutYou can't call it fact, and you can't call it reality,"he later added.
Other economists have also dismissed the idea that the dollar is being eliminated. Economists have previously told international commercial banks that once a currency is seen as a safe haven, it can take decades to replace it.
Federal Reserve Governor Chris Wallace said at Monday's meeting that despite the challenges faced by the dollar, there is no doubt about its current dominance.
"The U.S.'s role in the world economy is changing, and so is finance," Wallace said. "By many measures, the U.S. dollar remains by far the most widely used currency."
