SCO Countries Sound the Alarm: Is the US Dollar Too Risky for Trade?
The Shanghai Cooperation Organization (SCO), a rising force in international relations, is raising eyebrows with its increasing skepticism towards the US dollar. Concerns are growing among its member states about the risks associated with relying on the USD for trade, particularly regarding long-term stability. TEHRAN, Jul. 08 (MNA) – All member countries of the Shanghai Cooperation Organization (SCO) are aware of the risks of the use of US dollars from the point of view of the stability of international finance.
The SCO's Stance on the US Dollar
The SCO, also known as the Shanghai Cooperation Organization, has recently drawn attention because of its perspective on international trade currencies. The group has 10 member states (including observers and dialogue partners), and the collective sentiment is shifting towards exploring alternative currencies for trade settlements. This move isn't just about diversification; it's about mitigating potential vulnerabilities linked to US monetary policy and geopolitical influence.
Astana Summit Highlights Dollar Concerns
Recently, the SCO had a summit in Astana, Kazakhstan, and they stated that continuing to use the US dollar in international transactions was concerning. The discussion underscores a growing unease within the SCO regarding the dollar's dominance and the potential ramifications for member economies. Russian Deputy Prime Minister has been a vocal proponent of de-dollarization within the bloc.
Understanding the Risks of US Dollar Dependence
All member countries of the Shanghai Cooperation Organization (SCO) are aware of the risks of the use of US dollars from the point of view of the stability of international financial markets. These risks include:
- Geopolitical Instability: The US dollar's role as the world's reserve currency gives the US significant leverage, which can be used for political or economic pressure.
- Monetary Policy Fluctuations: Changes in US interest rates and monetary policy can have cascading effects on economies that heavily rely on the dollar.
- Sanctions and Trade Wars: Over-reliance on the USD makes countries vulnerable to US sanctions and trade restrictions.
De-Dollarization: A Global Trend?
All member countries of the Shanghai Cooperation Organization (SCO) are aware of the dangers of using US dollars from the point of view of the stability of international trade. The SCO's concerns echo a broader global trend towards de-dollarization, with countries seeking to reduce their reliance on the USD in international transactions. This trend includes exploring the use of national currencies, the creation of new reserve currencies, and the development of alternative payment systems.
What It Means for the Global Economy
When 11 countries stop using USD, the impact isn’t just localit reverberates through every corner of the financial world. Global financial stability and trade dynamics could be significantly altered as countries explore alternative currencies and payment systems. The SCO's move represents a potential challenge to the dollar's dominance and a step towards a more multipolar global financial system.