US economic sanctions jeopardize the dominance of the dollar: Janet Yellen
Image source: WION
In a recent statement, US Treasury Secretary Janet Yellen has acknowledged that the economic sanctions imposed by the US on countries around the world could undermine the hegemony of the US dollar. Yellen stated that there is a risk that financial sanctions linked to the role of the dollar could eventually endanger the dollar’s dominance as targeted nations seek alternatives.
Yellen added that the dollar’s global currency status is difficult for other countries to replace due to its unique properties. However, this acknowledgment comes at a time when nations across the globe are increasingly looking to drop the USD and use other currencies.
The US continues to impose sanctions on countries without considering the impact on the global economy and financial system. Last week, the US Treasury and State Departments imposed sanctions on nearly 120 targets, including Chinese, UAE, and Turkish firms, in an attempt to put pressure on Russia for its ongoing conflict with Ukraine. Experts have suggested that sanctioning Turkish and UAE firms, which are US ally countries, could have a negative impact. China has also expressed its opposition to the US sanctions, calling it an ‘illegal‘ move that seriously damages the legitimate rights and interests of enterprises and affects the security and stability of the global supply chain.
The USD has been the dominant currency since 1944, granting the US an insurmountable influence over other economies. However, since the start of the Russia-Ukraine war, the de-dollarization process has accelerated, and nations across the globe have started looking for alternatives. India has already signed agreements with 18 countries to trade in Indian rupees, and more recently, New Delhi announced an agreement with Malaysia to start trading in INR. Iran has also abandoned USD in its trade with China and Russia, while Saudi Arabia is set to abandon PetroDollar and accept PetroYuan.
Re-reported from the story originally published in WION
