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Russia sanctions, according to the IMF, threaten to undermine the dollar’s dominance – report

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Sanctions against Russia, according to Gita Gopinath, the International Monetary Fund’s First Deputy Managing Director, could undermine the US dollar’s global dominance (IMF).

“The dollar would remain the major global currency even in that landscape, but fragmentation at a smaller level is certainly quite possible,” Gopinath said in an interview with the Financial Times.

She went on to say that some countries have already begun to renegotiate the currency in which they are paid for trade.

Russia and India are working on a rupee-ruble mechanism that will allow them to trade in national currencies while avoiding the dollar.

According to Gopinath, the drastic restrictions imposed by Western countries in response to Russia’s military operation in Ukraine may result in the formation of small currency blocs based on trade between individual groups of countries.

Furthermore, the use of currencies other than the dollar or the euro in global trade would result in a further diversification of central banks’ reserve assets.

According to ex-Russian President Dmitry Medvedev, a new global financial order will be negotiated, and the West will no longer have a veto.

The “hellish” sanctions imposed on Russia by the US, EU, and their allies over the Ukraine conflict have failed to cripple the country, instead “returning to the West like a boomerang,” according to Medvedev, who is now the Deputy Chairman of the Russian Security Council, according to RT.

About the author

Brendan Byrne

While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala.

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