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In the state media began to often talk about the fact that the dollar allegedly expects a collapse. Is it really worth waiting for the collapse of the world’s most popular currency, economist, researcher at BEROC Oleg Mazol was asked.
STV employees believe that “the process has already acquired an irreversible character and it cannot be stopped so easily.” According to the Director General of BelTA Irina Akulovich, what leads to collapse is the way “America behaved politically.” “The Americans have created the image of a killer currency for the dollar,” she said. In the newspaper “SB. Belarus Today” with a reference to a Russian political scientist-Americanist Maleka Dudakova at the end of March, they talked about the upcoming weakening of the dollar and its departure from the position of the number one currency in the world.
To the question of “Mirrors”, is it true that we should expect the end of the era of the worldwide popularity of the dollar, the economist Oleg Mazol noted that statements about the imminent fall in the role of the dollar are an exaggeration.
— The dollar has been and will remain the main world currency. It dominates the world commodity market, forms the basis of the foreign exchange reserves of the countries of the world, two-thirds of all foreign exchange transactions are carried out in the American currency. According to the IMF, at the end of 2022, the total volume of world gold and foreign exchange reserves was estimated at $11.963 billion, of which $6.471 billion, or 58.4%, were US dollars. Next come the euro – 20.5%, Japanese yen – 5.51%, pounds sterling – 4.95%, and only then the Chinese yuan – 2.7%, – explains the BEROC expert.
The volume of global gold reserves that countries hold in Chinese yuan fell by 11.1% compared to the beginning of 2022, the economist continues. In his opinion, this may be the reason for China’s attempts to impose terms of trade on other countries in its currency. Although the transition of exporting countries to the Chinese yuan is not beneficial to them precisely because of the depreciation of the Chinese currency.
– If we take the same year 2022, then at the beginning of the year the dollar could be bought for 6.37 yuan, while at the end of the year it was already for 6.77 yuan, which results in a devaluation of 6.3% per year. This is the net loss of the exporting country from using the yuan for its exports. China has been using the artificial devaluation of its currency for decades to stimulate its exports, the so-called “currency dumping”, so only countries that are heavily dependent on China can have the yuan as a reserve currency and agree to receive yuan for exported goods and services,” Oleg believes. Mazol.
The economist cites the first yuan-denominated liquefied gas deal, in which Beijing purchased 65,000 tons of liquefied natural gas (LNG) from the UAE.
– This is not just a drop in the ocean, it is rather a drop in the ocean: the price of such a contract is about 35 million dollars. For comparison, 7-8 trillion dollars worth of currencies are sold on the world market per day, of which 88% of transactions are accounted for by a currency pair involving the US dollar. The share of the euro in such transactions is 31%, the pound sterling – 17%, the Japanese yen – 13%, the Chinese national currency is a participant in only 7% of foreign exchange transactions, – explains Oleg Mazol. – If we take a specific operation for the supply of LNG from the United Arab Emirates to China, which is used by Lukashenka’s propaganda, then in this case, under pressure from China, the UAE switches to yuan, not because their use in export payments is profitable, but in order to preserve the Chinese market, prices which is higher than, for example, on the European one.
“Thus, rumors about the imminent “death” of the dollar and its imminent replacement by the Chinese yuan, to put it mildly, are exaggerated by Belarusian propaganda. In my opinion, this is nothing more than an attempt to explain to Belarusian citizens the “genius” of the plan of reorientation to the East voiced by the Lukashenka administration, which is deeply unprofitable and leads to further degradation of the Belarusian economy. As an example, just look at the indicators of trade between Belarus and China: in the period 2011-2021, China sold $25.2 billion more goods to Belarus than it bought in Belarus. Moreover, in 2021, against the backdrop of the intensification of the “roll to the East” of the Lukashenka administration, the negative balance of Belarus in trade with China reached a record $3.19 billion. Propaganda can broadcast as much as necessary about the super-profitability of the reorientation of the Belarusian economy to the East, but even official statistics show the opposite. The PRC continues to use Belarus as a highly profitable market for its goods, and by selling goods worth tens of billions of dollars more to Belarus, it is possible to spread the red carpet in front of citizen Lukashenko, says Oleg Mazol.
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