Medvedev: U.S. actions feed de-dollarization idea
Russian Prime Minister Dmitry Medvedev said at the 10th Gaidar forum that the United States itself constantly feeds the de-dollarization idea with its actions.
"We are still dealing with the so-called exorbitant privilege of the dollar, about which Giscard d’Estaing once spoke," he noted.
"A country whose monetary unit is a key reserve currency, it also destroys its own credibility," TASS cited Medvedev as saying. "This is probably the paradox of the current situation. And the paradox is that the idea of de-dollarization receives constant incentives from the issuer itself," he stressed.
Medvedev predicts that the global trend of abandoning the dollar in the world will only grow. "Obviously, the trend to reduce dependence of national economies on the dollar will only increase. Economic actions such as sanctions and protectionism of the most powerful player in the economic arena only increase tensions," the PM added.
The advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house, economist Sergey Hestanov, speaking to Vestnik Kavkaza, noted that risks of using the dollar for payments are growing due to the threat of the introduction of new U.S. sanctions against Russia. "On a global scale, the dollar is in no danger in the next few years. Dmitry Medvedev’s statement more likely shows that Russia is worried about increasing sanctions pressure," he said.
A complete rejection of the dollar will be extremely painful for the Russian economy. "The price of such a decision would be a noticeable reduction in the range of imported goods in the Russian free sale and the deprivation of Russians of using foreign currency as a store of value," Sergei Hestanov noted.
The professor at the department of the stock market and investments at the Higher School of Economics, Alexander Abramov, also noted that Medevedev was referring to sanctions risks. "At the forum, Medvedev spoke, rather, about the confrontation between the U.S. and Russia in terms of sanctions and arrests of our citizens. Objectively, the dollar's role in the economies of various countries is declining, as the U.S. share in international trade is declining. In addition, there is still the problem of conflicts and sanctions. Russia is among the countries, going towards abandoning the dollar, but it's not a worldwide trend yet," he said.
"If Russia is applied the same sanctions that were once applied to Iran or Libya - freezing of foreign assets, disconnection from SWIFT, complete isolation from the dollar zone, then Russia will follow the path of abandoning the dollar more aggressively. To reduce the risks of sanctions and protect its economy, Russia reduced the U.S. share in foreign exchange reserves to 16% ($100 billion). In the future, Russia would like to switch to euro payments for energy supplied to the European Union and use the yuan in calculations more actively," Alexander Abramov predicts.