(Dollarization).. A rapid decline that includes Iraq and threatens American hegemony[You must be registered and logged in to see this link.] |Today, 18:2[You must be registered and logged in to see this image.]
Baghdad Today - Follow-up
The process of de-dollarization (dollarization) is accelerating around the world.
And “dollarization” can be defined as the state’s cessation of using its own national currency for losing its basic functions as a medium of exchange and a store of value, and resorting to the use of foreign currency such as the US dollar, the Japanese yen, the euro, or any convertible currency.
Until recently, it was unthinkable for the dollar to lose its strength, except perhaps for countries under US sanctions. But then Russia sent its forces to Ukraine.
And by imposing sanctions and cutting Moscow off from the global financial system, Washington has upset many emerging economies and pushed them to look for alternatives.
China has noticed and is now urging other countries to do the same, and this rising tide is eroding the dollar's hegemony.
Although no one in the world will abandon the American currency in the near future, the trend is clear: the economies of many countries are looking for settlement mechanisms and an alternative to reduce dependence on the United States.
For example, Russia already sells natural gas to China for yuan and France supplies LNG to China for yuan.
The possibility of introducing a single currency will be discussed at the BRICS summit (Brazil, Russia, India, China and South Africa) in August 2023, which will be held in South Africa.
It should be noted that the Iraqi government has banned the use of dollars in both private and commercial transactions from now on, and it is impossible to buy and sell foreign currencies.
The dollar ban in Iraq, which came into force on May 14, aims to expand the use of the national currency (the dinar), and strengthen it accordingly.
And the short-sighted actions of Western countries that applied sanctions against Russia created a real threat to their companies. Thus, it can be concluded that Western sanctions are not an effective tool for political pressure, and that weakening the role of the dollar is not only a matter of national security, but also a matter of global political and economic stability.