The end of King Dollar? The forces at play in de-dollarisation• https://www.msn.com By Naomi Rovnick and Libby Geo
Russia's sanctions-imposed exile from global financial systems last year also fuelled speculation that non-U.S. allies would diversify away from dollars.
Below are some arguments why de-dollarisation will happen - or possibly why it won't.
SLIPPING RESERVE STATUS
The dollar share of official FX reserves fell to a 20-year low of 58% in the fourth quarter of 2022, according to International Monetary Fund data.
Stephen Jen, CEO of Eurizon SLJ Capital Limited, said that shift was more pronounced when adjusted for exchange rate.
"What happened in 2022 was a very sharp plummeting in the dollar share in real-terms," Jen said, adding this was a reaction to the freezing of half of Russia's $640 billion in gold and FX reserves following its 2022 invasion of Ukraine. This had sparked a re-think in countries such as Saudi Arabia, China, India and Turkey about diversifying to other currencies.