US-Russia political tensions will speed up demise of dollar: Economist
An American economist says the political tensions between Washington and Moscow will speed up the demise of the US dollar in international transactions.
“The political tensions between the United States and Russia has increased or speeded up the process of which nations are doing business between countries instead of dollars and doing it with their local currencies,” Mark Thornton, Senior Fellow at Mises Institute, told Press TV on Wednesday.
“As a result, that puts pressure back on the United States because the United States wants everybody to use dollars in international transactions as well as a reserve currency in their central banks,” the professor at Auburn University added.
“These political tensions between the Soviet Union and Europe and the United States is simply speeding up what ultimately is going to be the demise of the dollar in terms of its international trading status as well as its status as a reserve currency in central banks,” Thornton said.
He made the comments after Russia and China on Tuesday agreed an economic pact that included boosting use of ruble and yuan for trade transactions instead of the US dollar.
“We’re going to encourage companies from the two countries to settle more in local currencies, to avoid using a currency from a third country,” Russian Deputy Prime Minister Igor Shuvalov said.
The move came after the United States and some European countries imposed sanctions on Russia, accusing the Kremlin of supporting pro-Russian forces in Ukraine.
Tensions between Washington and Moscow have escalated over the crisis in Ukraine.
Russia has denied involvement in Ukraine’s crisis and has warned of an asymmetrical response if more sanctions are implemented.