A fierce attack adopted by many countries to overthrow the main reserve currency in the world, which has been and continues to dominate global transactions for decades. There has been much talk during the current period about the world's desire to get out of the mantle of the dollar, or at least the major blocs such as the European Union and the BRICS group, which represent 42% of the world's population, its area constitutes one-third of the world's area, and its gross domestic product exceeds one-third of the global GDP. The last of these hints was what came from the head of the second largest economy in Europe, Macron, when he said, “We have to reduce dependence on the dollar,” in a message that the current situation is no longer tolerable.
There is no dispute that the dollar is viewed as one of the safest havens and investments in the world, but one of the factors that limit countries' enthusiasm for the US currency is the possibility of being subject to US jurisdiction when dealing in dollars. When US dollars are used or transactions are settled through a US bank, those entities are subject to US jurisdiction, even if they have no US relationship. In general, countries and companies dealing with dollars in their international relations and commercial dealings gives the right to the US judicial authorities to sue them in the event that they are not satisfied with these dealings, so we find that many countries are exposed to US sanctions through the use of the dollar.
The world is fed up with what is happening inside the US in terms of economic crises that affect all global economies, as if they were testing grounds for complex financial products like time bombs that could explode at any moment when they were exported to them. A strong dollar is painful for most of the developed, emerging and developing world, as it increases the prices of many products for consumers and businesses, causing inflation around the world. Even the dollar-denominated debts of countries and companies will struggle to find more of their local currency to service their debts in light of the rise and strength of the dollar, and the crisis experienced by Sri Lanka is the best proof of that. In the same context, the strength of the dollar creates pressure on global central banks to raise their interest rates to support their local currency so that there is no migration of that money to the United States of America, and this in turn will lead to more pressure on countries with high levels of debt.
Ali Muhammad Al-Hazmi