Russian Prime Minister Mikhail Mishustin revealed that the share of national currencies in the mutual settlements for the countries making up the Eurasian Economic Union (EAEU) is now at 90 percent.
The group was formed by Russia, Belarus and Kazakhstan in 2015 before being joined by Kyrgyzstan and Armenia; Vietnam is a free trade partner. It aims to ensure that workers, goods, services and capital can move freely between the countries that are part of the block.
In comments made at an EAEU intergovernmental council meeting on Friday, the Russian Prime Minister reported that the EAEU's GDP grew by 3.5 percent during the first 11 months of last year, with retail turnover increasing by more than six percent and industrial production rising by nearly four percent.
However, as trade among EAEU members continues to increase, the individual countries have been turning away from the dollar as well as the euro and are now relying more on their national currencies for mutual settlements.
In the future, it is believed that they will not rely on the dollar at all, with Russian President Vladimir Putin calling on the countries in the EAEU to form a dollar-free payment system with a view to “boosting economic sovereignty.”
A similar move is being seen BRICs countries, which include Brazil, Russia, India, China and South Africa. The Atlantic Council’s Dollar Dominance Monitor identified BRICS countries as posing a challenge to the dollar's status because its individual members have made a concerted effort to trade more using national currencies. At the same time, BRICS accounts for an increasing share of the global GDP.
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According to their report, the dollar makes up 58 percent of the value of all global foreign reserve holdings, while the second-placed euro makes up just 21 percent of foreign reserve holdings.
Experts warn dollar's days as world's reserve currency are over
Longtime financial analyst Richard X. Bove, who famously predicted the 2008 housing crisis three years before it happened and is known for expressing extreme opinions, has said that he believes the dollar is on the brink of a catastrophic collapse and that China will overtake the American economy soon.
He told the New York Times: “The U.S. dollar is finished as the world's reserve currency,” adding that other analysts don’t dare to say this because they are “monks praying to money” who are reluctant to speak against the mainstream finance system because they rely on it for their livelihoods.
Meanwhile, former White House economist Joe Sullivan wrote in a recent op-ed for Foreign Policy that BRICS countries are presenting a growing challenge for the dollar, outlining fears that the bloc could develop a currency that rivals the dollar in international trade and takes away its crown as the dominant reserve currency.
The bloc is also poised to expand after extending invites recently to Saudi Arabia, Iran, Ethiopia, Argentina, the United Arab Emirates and Egypt. For example, the addition of Saudi Arabia, Ethiopia and Egypt alone would be enough to give BRICS influence over 12 percent of overall global trade given their proximity to the Suez Canal.
"The BRICS+ nations do not need to wait until a shared trade currency meets the technical conditions typical of global reserve currency before they swing their newly enlarged economic wrecking ball at the dollar,” he wrote.
Meanwhile, projections from World Economics indicate that the Chinese GDP will be more than double the U.S. GDP in just over a decade.
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