Does "dollar dominance" threaten the global economy?
In the world of an intertwined economy with multiple competing powers, the dominance of the US dollar remains a pivotal issue that raises many questions, at a time when the dollar plays a major role in the international financial system, as it participates in the majority of international transactions and constitutes a large portion of global reserves, and this situation gives the United States power. tremendous economic and political potential, but it comes with increasing challenges and risks.
With the rise in US interest rates and the strengthening of the dollar, pressures have begun to appear on international transactions that rely heavily on the US currency.
These pressures not only affect emerging markets, but may also lead to radical changes in the global financial system. With increasing talk about alternatives to the dollar by members of the BRICS group, for example, there is renewed debate about the future of the dollar’s dominance and whether it will continue in light of the mounting economic and political challenges.
Sovereign debt
In a related context, Joe Yark, head of the global markets department at Cedra Markets, says that the US dollar represents 58 percent of global reserves, and represents 70 to 80 percent of the volume of global trade, in addition to the pricing of oil and basic commodities in the US dollar, which makes it have an impact. Mainly on the global economy.
Yark points out that the steps taken by the US Federal Reserve, whether tightening or easing monetary policy, of course affect global banks, which is evident with regard to raising interest in recent periods to combat inflation. He explains in this context that:
* The US Federal Reserve is playing a positive role at the present time. It is considered a “tempo officer.”
* The huge US debt and the risks resulting from sovereign debt are the only fear.
* The US Federal Reserve’s decisions due to its excessive debt, and the so-called “global debt bubble” which exceeded $315 trillion, negatively affect the global economy.
* Markets are affected by the Federal Reserve’s decisions to raise interest rates, which hampers the economy in these countries (..), which are forced to pay additional costs to purchase goods.
Dollar dominance
From London, economist Anwar Al-Qassim says, “The dominance of the greenback currently appears more fragile than it seems, given the expected changes in the dollar’s exchange rate system and its eroding international standing in favor of multiple international currencies.”
We are witnessing a clear shift. When most Asian countries follow China, along with countries such as Russia and the BRICS countries, the dollar, which currently represents the base currency for about two-thirds of global GDP, may end up losing approximately half of its value.
During 2023, Russia and China transferred more than 90 percent of trade to the yuan and the ruble, which demonstrates the almost complete elimination of the dollar in economic relations between the two countries.
He added: “China is now considered an economic giant, not only in terms of production and exports, but also in terms of the size of its financial sector, which is currently the largest in the world, with the value of its assets amounting to 60 trillion dollars...while the total American debt to the federal government exceeds 34 trillion dollars.” This is a record number that foretells the upcoming economic challenges and the future of the dollar.
He stresses that while it is not entirely clear that the dollar will be eliminated as the primary means of exchange anytime soon, abolishing “dollarization” has become a strategic option for many countries, led by Moscow and Beijing. link
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Tishwash: Washington is delaying its withdrawal from Iraq, and Baghdad is “evading”
Despite the many demands from some political forces and the Islamic resistance in Iraq to remove American forces, the government position is not at the required level regarding this issue.
Recently, Prime Minister Muhammad Shiaa Al-Sudani visited the United States and met with its President Joe Biden, while it was agreed to transform the relationship from military to economic and commercial based on trade exchange in various fields! .
Regarding the issue of removing American forces from Iraq, Representative Mahma Khalil said in an interview with “Al-Ma’louma” that “the law to remove foreign forces from Iraqi territory falls on the responsibility of the federal government,” stressing that “the law will work to remove every soldier, trainee, and advisor.”
Khalil called on "the government to work seriously on this issue and to expedite sending the law regarding the removal of American forces from Iraq to the House of Representatives for the purpose of voting on it."
*An explicit government position
In the same context, political analyst Sabah Al-Ukaili confirmed that the Iraqi government is not serious about the issue of removing American forces from the country.
Al-Ugaili told Al-Maalouma: “The political forces and the Iraqi government are not sincere in the issue of removing American forces from Iraq,” indicating “the American forces are not serious about leaving Iraq.”
He added, "The Iraqi government is evading this file despite the resistance factions' mandate to Prime Minister Muhammad al-Sudani," noting that "if the factions do not sense the seriousness of the Iraqi government in this regard, they will have another position "
He explained that "the method of the American military forces often violates the autonomy of the Iraqi state, most notably targeting the leaders of the Popular Mobilization Forces and other targets," calling on "the government to take a strict and resolute stance on this issue and to stay away from patchwork solutions and procrastination.”
For his part, the Chairman of the Parliamentary Security and Defense Committee, Karim Aliwi, confirmed in an interview with Al-Maalouma that “the talks taking place between the Iraqi and American delegations regarding ending the tasks of the international coalition forces are among the committee’s most prominent concerns,” noting that “the government asked the committee to be neutral and monitor those matters.” Dialogues. link
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