NEW YORK, May 8. /TASS/. Some countries are working on reducing their reliance on the dollar due to shocks related to the coronavirus pandemic and the conflict in Ukraine, as well as over national security concerns, First Deputy Managing Director of the International Monetary Fund (IMF) Gita Gopinath said.
"Some countries are reevaluating their heavy reliance on the dollar in their international transactions and reserve holdings," she said at the Stanford Institute for Economic Policy Research. "After years of shocks - Including the COVID-19 pandemic and Russia’s invasion of Ukraine - countries are reevaluating their trading partners based on economic and national security concerns," Gopinath added.
Meanwhile, "despite increased geopolitical risks, the latest data show that the US dollar remains dominant," she noted. "According to SWIFT, it [dollar] accounts for over 80% of trade finance <…>. It also accounts for nearly 60% of FX reserves despite the gradual diversification of FX reserves away from the dollar and partly into non-traditional reserve currencies such as the Australian dollar, and the Canadian dollar," First Deputy Managing Director of the IMF said.
Among US-leaning countries "the currency composition of trade finance" has not changed notably during 2022-23, she said, adding though that there have been more visible changes for China-leaning countries. "For the China bloc, the USD share of trade finance payments has declined since early 2022. At the same time, the RMB share has more than doubled, from around 4% to 8%," Gopinath said.