Advertisement
De-dollarisation interest jumps amid financial fragmentation, but US dollar dependence not ‘a very easy thing to overcome’
- International Finance Forum say a trend of using regional currencies rather than US dollar is a result of unprecedented US monetary tightening
- But dependence on the US dollar is not going to be a very easy thing to overcome, said former central bank of Malaysia governor Nor Shamsiah
Reading Time:3 minutes
Why you can trust SCMP
33
He Huifengin Guangdong
Interest in de-dollarisation is increasing given growing financial fragmentation risks worldwide, according to a report, but there is still not a credible alternative to the US dollar despite yuan internalisation efforts, political and financial leaders said at a forum at the weekend.
Advertisement
The report by the International Finance Forum (IFF) attributed the trend of using regional currencies rather than the US dollar to the adverse spillovers of unprecedented US monetary tightening.
The US Federal Reserve raised interest rates 11 times in 17 months, hitting a 22-year high in July.
“[De-dollarisation] could be one of the unintended consequences of the financial fragmentation,” the IFF report released on Saturday said.
Rising de-dollarisation could offer Beijing a chance to advance its ambitious plan of promoting more use of the yuan overseas, although the latest assessment from the People’s Bank of China (PBOC) suggested it still has quite a long way to go to challenge US dollar dominance.
Advertisement
Advertisement