Business & Economy

Salience of US Dollar To be Diluted: Jaishankar on De-dollarisation Trend

© Photo : taken from social media Screaming dollar
Screaming dollar - Sputnik India, 1920, 14.05.2024
The top Indian diplomat also predicted that the "reliance" on US Dollar, which has served as the dominant global reserve and international trade currency for decades, would be diluted in coming years.
Indian External Affairs Minister (EAM) S Jaishankar has said that the "salience" of the US Dollar (USD) would be “diluted” in coming years.
“Dedollarisation, to my mind, is putting it too strongly. Because at the end of the day, you see what the impact of dollar has been on everybody,” Jaishankar told an election-related event at the National Stock Exchange (NSE) on Mumbai on Monday.
Jaishankar, however, flagged two points on the broader global trend of the decreased usage of the greenback.

"If a country X and country Y, both have problems with the US and they will de-risk their transactions by finding a third or one-to-one option. We are beginning to see a lot of it. You look at a lot of other changes in the world. How countries have started to deal with each other more directly, not necessarily going through America, etc. It is bound to have a currency implication," Jaishankar highlighted.

"The second is that in many parts of the world, there is a shortage of the dollar. I go to Africa, one of the regular complaints we hear is that we would love to trade with you but we don’t have hard currency,” the top Indian diplomat stressed.

He said that trade settlements in local currencies and Indian Rupees (INR) had become "more attractive".

"It is a solution for problems… I can tell you in our immediate neighbourhood. If you ask me in the next five years, I see a big change coming. I think you are going to see much more trade settlements in our own currencies than we have ever seen before," the foreign minister stated.

"To that extent, I would say the kind of reliance on the dollar or the salience of the dollar would be diluted," emphasised Jaishankar.

Since 2022, the Reserve Bank of India (RBI) has allowed banks from over 20 countries to open Special Rupee Vostro Accounts (SRVA) at partner banks in India, a move aimed at streamlining trading in national currencies.
Screaming dollar - Sputnik India, 1920, 29.02.2024
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