Global De-dollarization is Accelerating

English Video: Global De-dollarization is Accelerating, 39 Countries Take Action Against U.S Dollar丨SWIFT丨INSTEX 全球去美元化加速,39國對美元採取行動

Going into 2022, the Federal Reserve has raised interest rates four times in a row, with three more rate hikes likely to follow. Central banks in developed countries have also generally adopted a strategy of following suit by introducing interest rate hikes. The level of recent interest rate hikes by the Fed and other central banks has exceeded 500 basis points.

The global wave of interest rate hikes could lead to a global recession. Given the lag in the transmission of the effects of monetary policy to the real economy, the dampening effect of interest rate hikes on economic activity will gradually emerge, with the rising cost of funds and reduced liquidity in the capital markets having a significant negative impact on business activities.
In the context of the Russia-Ukraine conflict, the “weaponisation” of the US dollar has triggered a security crisis in more sovereign countries, and more and more countries and regions have started the process of “de-dollarisation”.

According to statistics, about 39 countries around the world have started the process of “de-dollarisation”, with Turkey being the most typical, and oil-exporting countries such as Iran, Venezuela and Russia have started to explore the large-scale use of RMB for settlement. European countries have also started to promote the process of “de-dollarisation”,with the launch of Instrument for Supporting Trade Exchanges (INSTEX) in early 2019 to bypass the SWIFT dollar settlement system. India’s establishment of an Indian rupee based currency settlement system on 1 July 2022 is intended to facilitate the growth of India’s foreign trade and promote the Indian rupee as an international currency, while effectively hedging the economic risks to India from US and European sanctions against Russia.

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