De-dollarization has begun as recent trade deals elevate rivals, but the greenback is likely to remain a global currency, according to economist Peter C. Earle.
He pointed to last month’s deal between China and Brazil to settle trade in each other’s currencies, noting that it’s the latest example of a growing trend.
Writing in the American Institute for Economic Research last week, Earle added that use of the dollar in “economic warfare” as well as “error-fraught monetary policy regimes” are driving countries away from the greenback.
“And slower or more quickly, the dollar will lose ground abroad,” he said.
But in a follow-up post on Tuesday, Earle added that while rivals make gains, the dollar is still likely to remain a global currency.
“First, barring a truly extraordinary event or series of developments, a scenario in which the dollar is no longer used (at all) in international trade is highly unlikely,” he said.
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