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Society & Culture Around Town Book Excerpts Vigyapanti The Dating Story

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Opinion National Interest PoV 50-Word Edit

ThePrint On Camera Videos In Pictures

Society & Culture Around Town Book Excerpts Vigyapanti The Dating Story

More Judiciary Education YourTurn Work With Us Campus Voice

De-dollarisation is just fashionable debate. Every global crisis sends world back to dollar

Replacing the dollar necessitates not only a rival currency but also an equally robust financial market, trusted institutions, and an ecosystem of banks, investors & payment infrastructure.

In recent years, the concept of ‘de-dollarisation’ has transitioned from academic debate to a prevalent topic in geopolitical discussions. From BRICS summits to energy trade negotiations, policymakers are increasingly advocating for a reduction in reliance on the US dollar. Factors such as sanctions on Russia, the rise of China, and a more fragmented geopolitical environment have intensified speculation that the international monetary system may be entering a transformative phase. However, during periods of genuine uncertainty in global financial markets, investor behaviour tells a very different story.

In times of crisis, there remains a pronounced tendency to gravitate towards the dollar.

Over the past two decades, episodes of financial stress, geopolitical conflict, and market panic have consistently bolstered the dollar rather than weakened it. This explanation is attributable not to political dynamics but to the foundational architecture of global finance.

When panic hits, liquidity wins

Consider the global financial crisis of 2008. The crisis originated within the United States, triggered by the collapse of American mortgage markets and the failure of major financial institutions. One might have anticipated that investors would abandon the currency at the epicentre of the turmoil. However, the opposite occurred.

As markets descended into panic, global investors rushed to acquire US Treasury securities. Capital flowed into dollar-denominated assets despite the crisis having begun within the American financial system. This pattern reemerged during the Covid-19 pandemic of 2020. As financial........

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