According to the CEO of Russia’s VTB Bank, Andrey Kostin, the US dollar’s status as the dominant global currency is at risk due to the rising influence of the Chinese yuan. Kostin suggests that the actions taken by the United States and its allies to restrict Russia’s access to gold and foreign exchange reserves are prompting nations to seek alternative currencies for international trade settlements.
In a recent interview with Reuters, VTB Bank CEO Andrey Kostin expressed his belief that the Chinese yuan could potentially surpass the US dollar as the world’s leading currency. Kostin attributed this shift to the growing inclination of countries to explore currencies other than the USD for international transactions, following the US-led efforts to impede Russia’s access to significant gold and foreign exchange reserves.
Kostin highlighted China’s potential to loosen its currency controls, a crucial step towards establishing the yuan as a dominant global currency. He stated, “The era of the American dollar’s dominance is coming to an end. It’s time for China to gradually remove currency restrictions.”
China, which currently has strict foreign exchange rules, understands the need to lift these restrictions to attain its goal of becoming the world’s leading economic power. By allowing greater convertibility of the yuan, China can enhance its appeal and influence in the global financial landscape.
Kostin also cautioned against China’s continued accumulation of US debt, deeming it “dangerous.” Billionaire investor Ray Dalio echoed this sentiment, stating that countries are becoming cautious about investing in US debt due to the weaponization of the dollar by the West during the Ukrainian conflict. Dalio further warned of a potential US debt crisis, speculating that the government might encounter challenges in finding buyers for newly issued bonds.
As the US dollar faces potential challenges to its dominant status, the CEO of VTB Bank predicts the rise of the Chinese yuan as a contender. China’s willingness to ease currency controls and the hesitancy of countries to invest in US debt contribute to the evolving landscape of global currencies.
Source: https://bitcoinworld.co.in/vtb-bank-ceo-predicts-weakening-us-dollar-as-chinese-yuan-gains-momentum/