Nations De-Peg from the USD & Reducing US Influence in World Market Place (Topics: De-pegging, a concerted moving away from the US & USD and US control of world market place)
More and more nations are de-pegging from the USD, China has just de-pegged, along with many Asian nations, and Hong Kong and Saudi Arabia are considering it as well. These nations are de-pegging because it’s costing them too much to maintain their peg and they want their currency to devalue to make it more competitive in global markets and increase exports. Regardless of whether the USD remains the internationally designated world reserve currency or not, fewer nations are pegging to it, fewer are trading with it, and fewer USDs are being used in international trade, thus reducing US influence in the global market place.
• Most major nations have made trading treaties to directly exchange currencies with each other, bypassing the USD which is the designated World Reserve Currency (WRC).
• The World Bank added the Chinese Yuan to the list of world reserve currencies used by the nations of the world to borrow and create infrastructure, and the IMF added the Yuan to the Special Drawing Rates (SDR) currency basket: http://www.imf.org/external/np/exr/facts/sdr.htm This will reduce the amount of USDs currently used by the World Bank & IMF.
• The Asian Infrastructure Investment Bank (AIIB) became fully operational Jan 1, 2016 and the US is the only major nation which is not a member of this bank. The AIIB will compete with the current US controlled World Bank and the USD will not be an underlying currency in any of the AIIB’s loans or financing, thereby further reducing the use of the USD in the global market place.
• Both times the Yuan devalued, other currencies went up more than the USD, meaning there is more faith in other currencies like the euro, British Pound and Japanese Yen
These changes reflect a very deliberate move away from the USD and US control of the world market place. These changes will also undoubtedly reduce the use of the USD in the global market place from this point on.