Countries imposed by the US economic sanctions are looking to reduce dependence on the dollar and switch to using other currencies for payment with partners. This situation can negatively affect the position of the dollar in the global economy.
Many foreign governments are subject to US financial sanctions, and their economic partners are actively working to create favorable conditions, according to a report by the US Congressional Research Service. dependence on the US dollar can be reduced.
If countries move from one currency to another, the review document says, then the US could face a number of economic consequences, including the increase in the cost of loans.
Analysts stressed that Washington began to use the dollar more often to achieve foreign policy goals, including restricting Iran, Russia and Venezuela from accessing the US currency and markets. US financial school.
|Being used as a political tool harms the dollar itself|
It is the use of the US currency as a punishment tool that has caused many countries to boycott and give up USD; finding another currency, leading to a weakening in dollar transaction volume, stimulating other major currencies to take the throne. It also causes many countries to sell off US government bonds, buy gold and other currencies as reserves.
Even the European Union countries are seen as starting to consider the need to get rid of dependence on the dollar.
All of this poses a great risk to the hegemonic position in global payments and changes to the structure of national foreign currency reserves.
In addition, according to experts, the restrictions imposed by the US could have a number of other undesirable consequences for themselves, including retaliatory measures from sanctioned countries.
The document provides the example of a ban on imports of Russian agricultural products that has had a negative impact on the fishing industry in Alaska, as well as on apple and pear producers in the state of Washington.
The new US Congressional report raises concerns about the US dollar, especially when experts have recently predicted that, for both objective and internal reasons, the dollar has will be devalued by a third in 2021.
The American economist, former Morgan Stanley Asia director, Stephen Roach, expressed his opinion in an article published on Bloomberg that the US dollar, which is weakening very strongly, will fall deeper by the end. year 2021.
Economic experts said that, facing adverse scenarios of the weakening economy due to the coronavirus (COVID-19) pandemic; the crisis of American democracy and the stimulus packages of trillions of Washington administration, the value of the US currency can fall by up to 35%.