Russian Sanctions Will Only Speed Up Moves To Limit The U.S. As A Reserve Curency

The dollar is currently boosted by being a reserve currency Photo: Reuters

Russia Sanctions Accelerate Risk to Dollar Dominance -- Bloomberg

U.S. and European Union sanctions against Russia threaten to hasten a move away from the dollar that’s been stirring since the global financial crisis.

One place the shift has become evident is Hong Kong, where dollar selling has led the central bank to buy more than $9.5 billion since July 1 to prevent its currency from rallying as the sanctions stoked speculation of an influx of Russian cash. OAO MegaFon, Russia’s second-largest wireless operator, shifted some cash holdings into the city’s dollar. Trading of the Chinese yuan versus the Russian ruble rose to the highest on July 31 since the end of 2010, according to the Moscow Exchange.

While no one’s suggesting the dollar will lose its status as the main currency of business any time soon, its dominance is ebbing. The greenback’s share of global reserves has already shrunk to under 61 percent from more than 72 percent in 2001. The drumbeat has only gotten louder since the financial crisis in 2008, an event that began in the U.S. when subprime-mortgage loans soured, and the largest emerging-market nations including Russia have vowed to conduct more business in their currencies.

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Update #1: The dollar's 70-year dominance is coming to an end -- Liam Halligan, The Telegraph
Update #2: There are no reasons for the dollar to be world’s reserve currency -- Peter Schiff, RT

My Comment: The move away from the U.S. dollar as a reserve currency (and U.S. economic dominance) is gathering speed .... but it is going to take time .... The BRICS Don’t Like the Dollar-Dominated World Economy, but They’re Stuck With It (Time).