Officials said there was no imminent risk to the US dollar
Deputy Prime Minister of the International Monetary Fund (IMF) Gita Gopinato said in a virtual debate on March 22 that the war between Russia and Ukraine could cause fragmentation of the global payment system, worldwide from the US dollar. The possibility of a shift was shown.
“What we see all over the world is increasing the fragmentation of the payment system, which will probably increase further after this war,” Gopinus said. Discussion Broadcast on the IMF YouTube channel.
“We know that energy trade will never look the same after this war, and in some countries how much certain currency is in reserves. We may revisit it, so fragmentation is certainly an important concern, “Gopinath said.
However, she added that sanctions and related cases against Russia do not indicate the “imminent end” of the US dollar.
Gopinath pointed out that currencies tend to have a “complementary role.” For example, they have a role as a means of payment and another as a store of value.
When parts of the world start trading in currencies other than the dollar, or save in other forms of currency assets, “you may see pockets where shifts can occur,” she said. Added. – The longer the Ukrainian war, the greater the impact.
Gopinas feels that the economic sanctions imposed on Russia by the invasion of Ukraine are “justified” and the impact of these sanctions on Russia’s currencies and financial markets is “very dramatic.” “.
When the IMF publishes its biannual World Economic Outlook Report in April 2022, it will present an assessment of the economic implications of these sanctions, the organization’s deputy secretary said.
Regarding whether Russia can use cryptocurrencies to circumvent sanctions, Mr Gopinas said the IMF has no clear outlook on the issue at this time. However, the organization is tracking the problem “very closely.”
Recent events will “accelerate” the consideration of digital currencies by central banks around the world. Gopinath says more regulatory work needs to be done when it comes to digital currencies.
Western sanctions on Russia have frozen central bank gold and foreign exchange reserves worth about $ 300 billion. In addition, the European Union has also separated seven Russian banks from the SWIFT payment system.
Russian Foreign Minister Sergeĭ Viklov has called the $ 300 billion freeze “theft,” Russian media reported.
US $ 7 trillion, or 55% or moreOf the $ 12.8 trillion in the Central Bank Reserve Fund in the third quarter of 2021, according to IMF data. The euro came in second with $ 2.5 trillion, or just over 19%. The Chinese yuan is $ 318 billion, accounting for 2.47% of the world’s central bank reserves, and is the fifth largest after the Japanese yen and the pound sterling.
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Naveen Athrappully is a news reporter on business and global events in The Epoch Times.