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Putin is targeting the US dollar as a reserve currency

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Putin is targeting the US dollar as a reserve currency

Russian President Vladimir Putin speaks during his annual meeting with participants of the Valdai Discussion Club on October 5, 2023 in Sochi, Russia. Contributor/Getty Images

Vladimir Putin has criticized the US dollar’s status as a world reserve currency in a new interview.

Putin particularly opposed the American practice of using the dollar to impose economic sanctions.

“Using the dollar as a tool of foreign policy struggle is one of the biggest strategic mistakes of the US political leadership,” Putin said.

This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.

The Russian President Wladimir Putin took aim at the U.S. dollar’s status as the world‘s reserve currency in his interview with Tucker Carlson this week. Putin particularly opposed the US practice of using the dollar to impose economic sanctions, such as banning foreign business with certain countries and people.

“Using the dollar as a tool of foreign policy struggle is one of the biggest strategic mistakes of the US political leadership,” Putin said.

He continued: “It is the United States’ primary weapon to maintain its power in the world. As soon as the political leadership decided to use the US dollar as a tool of political struggle, this American power was dealt a blow. This is stupidity and a serious mistake.”

The USA had imposed strict sanctions

Hoping to harm the Russian economy, have The USA imposed strict sanctions against Russia after the invasion of Ukraine in February 2022. Economic trade between the two countries has come to a standstill and Russia and its citizens are barred from conducting business in U.S. dollars.

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Putin said the Russian ruble and Chinese yuan had largely replaced the U.S. dollar in his country’s trade and said American economic sanctions were hurting its economy.

“I consider this to be complete nonsense in the interests of the United States itself and its taxpayers, because it harms the US economy and undermines the power of the United States in the world,” Putin said.

Putin’s claim that America’s use of the dollar to impose economic sanctions is hurting the American economy is far-fetched given recent data, as the growth of the US economy has accelerated significantly since sanctions were imposed on Russia in 2022.

The US dollar is by far the leading currency

Putin also said that the Chinese yuan could play a larger role in replacing the dollar on the global stage, although this has not yet materialized to any significant extent.

The US dollar has lost its dominance as the world‘s reserve currency over the past two decades, but is still the leading currency by a wide margin.

According to the IMF In the third quarter of 2023, the US dollar accounted for 59 percent of global reserves, down from 70 percent in 1999.

After the dollar, the euro has a 20 percent share, and the Japanese yen and the British pound together have a 10 percent share. The Chinese yuan, on the other hand, only accounts for 2.4 percent of global currency reserves.

That’s just one of the reasons why some Wall Street strategists assume that the US dollar will remain king for the foreseeable future.

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