The potential end of the hegemony of the dollar is still debated and its possible replacement by a common currency of the bricks. In recent weeks, many analysts and experts have spoken out on the issue. Essentially, they play down these projections deemed alarmist. The rating agency Moody’s also seems to follow this logic.
No competing currency to compete with the dollar
More and more, the positions taken on the announced end of the dollar seem to coincide. Thus, according to several analysts, the American currency would not be as threatened as claimed. Recently, Billionaire Chamath Palihapitiya even suggested that the situation, if verified, would be an opportunity for the country.
The rating agency Moody’s is also invited to the debate. And his position does not mark a change of tone at all. Moody’s idea is that the US currency is so strong that it currently has no rival. In any case, no competitor who can dethrone her.
According to Moody’s, attempts by the BRICS countries to implement a common currency would be futile. This, especially since none of the currencies of these countries is supported by an economy as dynamic as that of the United States.
Thus, neither Brazil, Russia, India, China, even less South Africa would have a Treasury securities market as relevant as the American one. Conclusion: the end of the dollar is not for now.
Except to consider factors intrinsic to the American financial system which, themselves, can really destroy the global financial impact of the dollar. The possibility for the United States to default on its debt would be one of these factors according to Moody’s. It would also be, underlines the rating agency, “the greatest near-term danger to the dollar’s position”.
Be that as it may, some believe that a failure of the American financial system is undesirable. According to Kristalina Georgieva, director of the International Monetary Fund (IMF), this prospect would jeopardize the world economy.
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