https://en.sputniknews.africa/20230428/excluding-dollar-in-trade-indicate-countries-do-not-follow-in-washingtons-footsteps-say-experts-1058893442.html
Excluding Dollar in Trade Indicate Countries Do Not 'Follow in Washington's Footsteps', Say Experts
Excluding Dollar in Trade Indicate Countries Do Not 'Follow in Washington's Footsteps', Say Experts
Sputnik Africa
Argentina's refusal to use the US currency in trade with Beijing will ease the position of the Argentine Central Bank, but will not change its vulnerable position, Francisco Cantamutto, an economist and researcher told Sputnik.
2023-04-28T14:59+0200
2023-04-28T14:59+0200
2023-08-03T10:48+0200
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Buenos Aires' decision to retire the use of the US dollar follows the present trend of disputing the US superiority, as many nations refuse to "follow in Washington's footsteps," which puts the pressure on Washington with other global players filling the currency gap, Francisco Cantamutto, an economist and researcher at the National Scientific and Technical Research Council (Conicet), told Sputnik.In this context, the agreement with China can be seen as a way to put pressure on the White House, Cantamutto added.According to Bermúdez, the benefits of the announced bilateral pact are twofold: it not only reduces dependence on the dollar, but also forces the IMF to reconsider its position towards Argentina.China is counterbalancing the US, which is forcing other countries to search for partners with the ability to adapt to the terms of agreements, the analyst claimed.Moreover, the expert noted that the gradual transformation underlying the statements points to the strengthening of the Asian currency in the global trade dispute. At the same time, Cantamutto noted that Argentina's refusal to use the US currency in trade with Beijing will ease the position of the Argentine Central Bank, but will not change its vulnerable position, Cantamutto stressed.The analyst's opinion is shared by his colleagues.The expert has also outlined that quiet changes are reflected in concrete facts, such as the agreement between Brazilian president Lula da Silva and Xi Jinping on bilateral trade.Earlier this month, Lula da Silva paid an official visit to China, where he met with Chinese President Xi Jinping. In Beijing, the parties held closed-door talks and signed a number of bilateral agreements to improve cooperation in finance, media and telecommunications, the aerospace industry, the development of hydrogen energy and the construction of wind farms. According to media reports, the signing of these agreements will result in the attraction of $1.3Bln to finance Brazil's infrastructure, the appearance of a branch of the Chinese ICBC bank in the South American country (which will allow cheaper and faster conversion than available elsewhere of the Brazilian real into the Chinese yuan), as well as linking the Brazilian-Chinese bank BBM to the Chinese alternative to the SWIFT — CIPS system.In June 2022, Russian President Vladimir Putin stated that the BRICS countries were working on creating a new reserve currency backed by solid assets such as oil and gold. It is expected that the development of an alternative currency will be discussed in more detail at the forthcoming BRICS summit, which will be hosted by South Africa in late August 2023.
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Excluding Dollar in Trade Indicate Countries Do Not 'Follow in Washington's Footsteps', Say Experts
14:59 28.04.2023 (Updated: 10:48 03.08.2023) Earlier this week, the government of Argentina announced the decision to pay for Chinese imports in yuan instead of dollars. The measure is aimed at reducing the country's shrinking dollar reserves. The decision is seen as a gesture of autonomy from Washington in a global de-dollarization scenario, experts say.
Buenos Aires' decision to retire the use of the US dollar follows the present trend of disputing the US superiority, as many nations refuse to "follow in Washington's footsteps," which puts the pressure on Washington with other global players filling the currency gap, Francisco Cantamutto, an economist and researcher at the National Scientific and Technical Research Council (Conicet), told Sputnik.
"More and more often we see the dollar falling out of international triangulation. China has become a major investor in Latin America and the Caribbean, an area that the US used to consider its privileged zone of influence,” Ismael Bermúdez, a economic correspondent, said.
In this context, the agreement with China can be seen as a way to
put pressure on the White House, Cantamutto added.
“This is a gesture aimed at toughening measures against the US […] Argentina has been working to normalize relations with Washington, but now when it is necessary to renegotiate the agreement with the IMF, it puts pressure on them to show that Buenos Aires is not in their pocket," Cantamutto said.
According to Bermúdez, the benefits of the announced bilateral pact are twofold: it not only reduces dependence on the dollar, but also forces the IMF to reconsider its position towards Argentina.
"The only way for the US to neutralize China is to become an important helper to our country, and we know that whatever the IMF does is in the hands of the White House," he said.
China is
counterbalancing the US, which is forcing other countries to search for partners with the ability to adapt to the terms of agreements, the analyst claimed.
"The United States is not softening policy, but forcing countries to look for partners with a greater ability to adjust to the conditions of agreements, and this is where China appears," Bermudez pointed out.
Moreover, the expert noted that the gradual transformation underlying the statements points to the strengthening of the Asian currency in the global trade dispute.
"The yuan is strengthening as a global currency, putting pressure on the dollar. This is being achieved by increasing the yuan`s presence in all transactions where it is useful, for example, in trade with Argentina," Cantamutto said.
At the same time, Cantamutto noted that Argentina's refusal to use the US currency in trade with Beijing will
ease the position of the Argentine Central Bank, but will not change its vulnerable position, Cantamutto stressed.
"We have to be careful as we are in a highly uncertain and very delicate situation," he emphasized.
The analyst's opinion is shared by his colleagues.
"This announcement is a relief as it means the country no longer depends on the dollar for trade, but the lack of resources is what is very worrying," Bermúdez, said.
The expert has also outlined that quiet changes are reflected in concrete facts, such as the agreement between Brazilian president Lula da Silva and Xi Jinping on bilateral trade.
"So far as Argentine residents are concerned, the dollar is a store of value, but as a means of exchange, its weight is relative: we trade more with China than with the US," he added.
Earlier this month, Lula da Silva paid an official visit to China, where he met with Chinese President Xi Jinping. In Beijing, the parties held closed-door talks and signed a number of bilateral agreements to improve cooperation in finance, media and telecommunications, the aerospace industry, the development of hydrogen energy and the construction of wind farms.
According to media reports, the signing of these agreements will result in the attraction of $1.3Bln to finance Brazil's infrastructure, the appearance of a branch of the Chinese ICBC bank in the South American country (which will allow cheaper and faster conversion than available elsewhere of the Brazilian real into the Chinese yuan), as well as linking the Brazilian-Chinese bank BBM to the Chinese alternative to the SWIFT — CIPS system.
During his stay in China, Lula called on BRICS countries to trade in their own currencies and put an end to the dominance of the dollar in trade.
In June 2022, Russian President Vladimir Putin stated that the BRICS countries were working on creating a new reserve currency backed by solid assets such as oil and gold.
It is expected that the development of an alternative currency
will be discussed in more detail at the forthcoming BRICS summit, which will be hosted by South Africa in late August 2023.
