Dedollarization continues in Asia. After nations like India or Indonesia, Thailand is in turn snubbing the dollar.
Dollar not scratched
The Bank of Thailand supports the use of local currencies instead of the US dollar to settle its trade with its international partners. This is what the deputy governor of the Thai central bank wants.
Alisara Mahasantana believes that using local currencies (the Chinese yuan, Malaysian ringgit, Indonesian rupiah and Japanese yen) will minimize the risk posed by fluctuations in the US dollar. The aim is to provide Thai businesses with an alternative.
“During periods of high dollar volatility, economic operators may choose to use local currencies to make payments. This reduces exchange rate risk and facilitates trade negotiations”has she explain.
This explanation, however, seems like window dressing. Indeed, the global revolt against the imperial currency is palpable. In question, the sanctions against Russia which saw the equivalent of 300 billion dollars of foreign exchange reserves confiscated.
If the world’s leading nuclear power can be robbed in this way, no one is safe in the event of non-alignment with its foreign policy. Asian countries have understood this well.
Indonesia, Malaysia and Thailand signed a tripartite agreement this summer beginning to promote trade in their national currencies.
Abandoning the dollar, the euro and the Pound Sterling was also put forward by the Association of Southeast Asian Nations (ASEAN) at the start of the year.
Gold fever
The Thai central bank is banking on gold to diversify geopolitical risks. Gold remains a safe haven, Alisara Mahasantana told Bloomberg News.
‘Gold purchases help protect Thailand’s foreign exchange reserves’, she said. These are currently valued at $210 billion.
Indeed, a good part of these reserves are in US Treasury bonds. However, their value has melted following the Fed’s rate hike…
The governor revealed a significant increase in her gold reserves to mitigate such risks. They have more than doubled since 2019. The central banks of many other countries such as China, Poland and Turkey are not to be outdone.
The ounce of gold is currently on the verge of setting a new record. This enthusiasm is due to the purchases of central banks which sense the new Bretton Woods coming.
The wars in Ukraine as well as in the Levant are a symptom of the global rejection of American imperialism. The nations no longer want to finance the American debt and are taking advantage of the breach opened by Moscow to fight back.
Gold always returns to the center of trade when war breaks out. Except that now, a new contender for the title of international reserve currency is knocking hard at the door: bitcoin.
Unlike gold, of which 3,000 tonnes are extracted each year, there will never be more than 21 million bitcoins. Furthermore, bitcoin costs nothing to move from one end of the world to the other…
All central banks will sooner or later have to recognize that bitcoin is a superior safe haven to gold. Following the halving which will take place next May, the monetary inflation of bitcoin will officially be lower than that of gold…
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