De-dollarisation refers to the process by which countries reduce their reliance on the U.S. dollar in international trade, finance, and reserves. This shift typically involves promoting the use of alternative currencies, such as local or regional currencies, for trade settlements, foreign reserves, and investment transactions. The goal of de-dollarisation is to decrease dependency on the U.S. dollar and the influence of U.S. monetary policy on national economies.
Countries pursue de-dollarisation for various reasons, including:
- Reducing vulnerability to U.S. sanctions or economic pressures.
- Mitigating exchange rate risks linked to the U.S. dollar.
- Strengthening national currencies by promoting their use in global markets.
In recent years, BRICS countries and others have discussed de-dollarisation as a strategy to create a more balanced global financial system, with some exploring trade agreements in alternative currencies like the Chinese yuan or the euro.
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