The International Monetary Fund's Deputy Managing Director says the sanctions against Russia are likely to undermine the US dollar's global dominance as a trade currency.
"The dollar would remain the major global currency even in that landscape, but fragmentation at a smaller level is certainly quite possible," Gopinath said in an interview with the Financial Times.
According to Gopinath, the drastic restrictions imposed by Western countries in response to Russia's military operation in Ukraine may result in the formation of small currency blocs based on trade between individual groups of countries.
The use of currencies other than the dollar or the euro in global trade would result in a further diversification of central banks' reserve assets.
The efforts of NATO and the western alliance to crush the Russian currency have failed.
The Russian ruble currency has jumped back from the sanctions and is now even stronger than before the sanctions were put into place.
Experts have cautioned against taking current Russian polls on face value, given that Russian authorities have pursued a crackdown against dissent, including a media blackout of any reports contrary to the Kremlin's narrative about Russia's actions in Ukraine.
Thursday, March 31, 2022
International Monetary Fund Warns Russian Sanctions Will Undermine U.S. Dollar Global Dominance as Trade Currency
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