CEI defolarization marks a turning point in the global financial system, challenging the hegemony of the dollar and consolidating the progress of local currencies in international trade.
The dollar American faces an unprecedented challenge, since 11 countries decided to do without use in international commercial transactions. These nations, which are part of the community of Independent States (CEI), chose to strengthen their local currencies with the aim of reducing their dependence on the dollar and improve your competitiveness in the currency market.
This turn responds to a global trend known as “Delarization“, which gained greater impulse after the economic sanctions imposed on Russia in 2022. Beyond a political decision, the movement seeks to guarantee greater financial autonomy and remodel the international economic system.
Currently, more than 85% of transactions between CEI countries are carried out in their own currencies, a measure that their leaders consider key to strengthen economic sovereignty and diversify their financial opportunities.
Dollar, what are the countries?
The countries involved in this strategy are Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrguistan, Moldova, Russia, Tayikistan, Turkmenistan, Uzbekistan and Ukraine. Despite tensions between Russia and Ukraine, most of these countries maintain close economic ties and have decided to advance together towards a financial system less dependent on the dollar.
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The reasons behind this decision are both political and economic, highlighting three main factors:
- Strengthening of your coins in the international market.
- Protection against sanctions and restrictions imposed by foreign powers.
- Diversification of their reserves, incorporating assets such as gold.
Russian President, Vladimir Putinhas supported this initiative by pointing out that “the use of national currencies in mutual payments is constantly growing, with a participation that already exceeds 85% in trade between CEI countries.”
Global impact of defolarization
The abandonment of the dollar in these economies can significantly alter international trade and finances. With a lower dependence on the green ticket, the CEI nations can:
- Reduce the economic influence of the United States on the global stage.
- Create more autonomous financial markets, based on their own currencies.
- Mitigate the risks associated with the fluctuations of the dollar.
However, this transformation also involves challenges for the US currency. A lower demand for the dollar in international trade could affect its value and weaken its position as the main global reserve currency.
If more emerging countries follow this path, the hegemonic role of the dollar could gradually erode in the coming decades, marking a turning point in the global economic order and promoting the prominence of alternative currencies.
Source: Ambito
I’m a recent graduate of the University of Missouri with a degree in journalism. I started working as a news reporter for 24 Hours World about two years ago, and I’ve been writing articles ever since. My main focus is automotive news, but I’ve also written about politics, lifestyle, and entertainment.
