Russian President Vladimir Putin has stated the growing use of national currencies for cross-border exchanges signals the end of the hegemony of the US dollar.
Speaking on Friday at the St. Petersburg International Economic Forum (SPIEF), Putin said the present trend of using local currency for cross-border trade, including in the energy trade, indicates the demise of the dollar.
The Russian leader said currently more than 80 percent of Russian trade with China was either in yuan or rubles, while about 90 percent of Russia's trade with the countries of the Eurasian Economic Union was done in rubles.
Putin pointed out that the dollar reserves held by the world's major economies were rapidly getting smaller, as are trade settlements using the US currency, while many nations are pitching projects to create new reserve currencies.
“The share of settlements in the dollar is declining. The share of settlements in yuan is growing," he said.
"Oil producers in the leading Arab countries are now saying that they are ready to pay for oil in yuan… If this trend gains momentum and other oil and gas exchanges appear where settlements are not made in dollars, then this is the beginning of the end for this currency,” Putin said.
Putin insisted that Russia has never had any intentions to de-dollarize, neither its domestic economy nor the global economy.
However, he pointed out, due to the US sanctions policy against Russia after the Ukraine crisis, Moscow was forced to ditch the greenback for other currencies to keep its economy running.
“We have nothing to do with it. They are doing everything with their own hands... By pursuing short-term, opportunistic political goals they undermine their power -including in world finance. Because by using the dollar as a war tool – and there is no other way to put it – they raise doubts about the reliability of the American currency both as an instrument of payment in global trade and as a reserve asset,” Putin explained to the audience at the SPIEF forum.
With Washington’s economic and political decline emerging powers are taking the multilateral approach.
Russian and Chinese alliances with other countries have given rise to powerful groupings such as the Shanghai Cooperation Organization (SCO), which contributes about 30 percent of the global Gross Domestic Product (GDP), and BRICS, which comprises 40 percent of the world’s population, offering an alternative in international trade to the Bretton Woods Institutions led by the United States.
SCO is an international intergovernmental organization comprised of Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan while BRICS is an acronym for the current members of a group consisting of Brazil, Russia, India, China and South Africa.
Following a recent BRICS summit in Cape Town, South Africa, Iranian Foreign Minister Hossein Amir-Abdollahian pointed out that the five BRICS nations accounted for a fifth of the world’s GDP, one-third of its territory, and 40 percent of its population and embracing and forging cooperative relations with emerging powers will be critical for navigating the complex landscape of the 21st century.
In this regard, the rise and decline of the United States offers valuable lessons to its allies and adversaries alike, that unipolar world order is flawed from the start and doomed to fail due to its philosophy rooted in the Darwinian selective approach.
The emerging order, on the other hand, calls for collaborative leadership, where nations come together as one collective entity with the objective to address today's problems including wars, hunger, climate change, poverty, illiteracy, social-economic gap and terrorism, as well as the outbreak of disease.
In related news, South Africa’s President Cyril Ramaphosa said on Friday that he will have a bilateral meeting with Putin to discuss the BRICS summit.
Ramaphosa was speaking after a meeting between African leaders and Ukraine's President Volodymyr Zelensky in Kiev.