What factors contribute to dedollarization?

Answered on : 2024-01-24

Sources

Dedollarization is not just geopolitics, economic fundamentals ...

atlanticcouncil.org

De-dollarization: Is the US dollar losing its dominance?

jpmorgan.com

Josh Lipsky

twitter.com

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Dedollarization is driven by a combination of geopolitics and economic fundamentals. While geopolitical factors play a significant role in the push for dedollarization, such as concerns over the dominance of the U.S. dollar and the desire for greater financial independence, economic fundamentals also play a crucial role. Interest rate differentials and fluctuations in the dollar's global dominance are important factors that contribute to dedollarization. The trend of dedollarization is not a recent phenomenon, as the dollar's share of global reserves has decreased over time. Countries around the world are looking to reduce their dependence on the U.S. currency, leading to the unstoppable trend of dedollarization [1][2][3][4][5][6][7][8][9].