Ali Al Bastaki, a global markets expert, said that the demands of some BRICS leaders to abandon the dollar as the main currency for commodity trading and settlement of payments are difficult and nearly impossible demands, to the extent that they may require a miracle.
He pointed out that offering an alternative currency to the dollar is a complex process that takes a long time to gain confidence in this currency, and that large and huge quantities are traded, as is the case with the dollar, which is considered the “master of currencies.”
Commenting on the call to replace a new BRICS currency with dollars, he said: “All necessary commodities are priced in dollars, and the dollar is considered a safe haven for investments, even compared to gold at the present time, as US bonds achieve high financial returns and attract investors.”
Russian President Vladimir Putin said a few days ago that “abandoning the dollar as a global currency is an irreversible process.” He added during his speech at the BRICS summit held in South Africa that the BRICS group of countries is discussing the transition to dealing in local currencies in all areas of economic cooperation among them.
Al-Bastaki continued, “I do not see any possibility of a currency competing with the dollar in the future. I am talking for a period of no less than 50 years. Any new currency will take a long time to find a space for it in the global market.”
It is noteworthy that in July 1944 in the midst of World War II, 44 countries in the world agreed to fix foreign currencies against the dollar, where the dollar was set at a price of $ 35 per ounce of gold to establish a new global financial system, to help overcome the effects of the economic war, before it In 1971, US President Richard Nixon announces the cessation of converting the US dollar into gold, following talk of countries seeking gold in exchange for the dollar and putting pressure on the US gold stock.
Al-Bastaki indicated that with regard to the volume of US dollar transactions, it is considered the most traded currency in the world, and according to the statistics of the Bank for International Settlements (BIS), it is estimated that about 88% of daily currency trade takes place using the US dollar. This includes international banking, international trade, and oil and other commodity deals. In addition, the US dollar is used in many international financial transactions such as loans, bonds, and financial derivatives.
He stressed that central banks attach great importance to the US dollar, as they use it as a unit for settling foreign transactions and for regulating internal monetary policies. The uses of the US dollar contribute to achieving financial and economic stability in different countries. When countries face financial or economic crises, reliance on the US dollar is one of the means available to maintain the stability of the financial system and enhance confidence.
He believes that despite the great importance of the US dollar, there are discussions about abandoning it as the main currency in the global financial system, and trends in some countries and organizations to diversify and reduce dependence on the US dollar. However, any such transformation faces many challenges, including creating a strong and globally accepted alternative currency and its impact on global financial stability.
He explained that all countries in the world have large holdings of US bonds, including China, which has the largest holdings, pointing out that any decline in these bonds will lead to a great loss for most countries in the world, banks and institutions.
Al-Bilad newspaper warns the various profitable electronic news platforms, of the need to be careful, as stipulated in the law on the protection of intellectual property rights, against the illegality of transmitting or quoting the content of this journalistic article, even if the source is indicated.
