Russia and China join forces in “de-dollarization” of currency reserves
According to the statement made by Vladimir Putin during his recent visit to Shanghai, Russia and China have reached an unprecedented level of cooperation that encompasses aspects ranging from energy trading to military drills. Moreover, the Russian President suggests that the two countries are working together in order modify the existing practices regarding currency reserves management. Washington should be very concerned.
Moscow and Beijing are working together to figure out how to organize the global “de-dollarization” in an orderly manner that will bring maximum benefits for the newly established economic alliance. Washington has been receiving its unfair share of benefits from its right to print the world’s main trading and reserve currency but dollar’s status is not set in stone and it largely depends on two factors: the need to use the dollar in order to buy oil (“petrodollar” circuit) and the use of the dollar as the main “store of value” in global currency reserves held by the countries with positive commercial balances.