Russia's Foreign Minister Sergei Lavrov has suggested that U.S. dollar could be losing its status as world's most important currency. Mr Lavrov said that because U.S. has imposed economic sanctions on countries like Iran, Turkey and Russia, these countries could start conducting international business in their own national currencies instead of dollar. In addition, countries that have had trade tariffs imposed on them by U.S. could also do trade in their own currencies. This could include global economic superpower China ditching dollar. China is already setting up trade deals in its own currency. Experts say the U.S. dollar could lose its position as international reserve currency.
The U.S. dollar replaced British pound as international reserve currency in 1920s. Since then, most international trade has taken place using dollar. Today, when China buys oil from Iran, it pays in U.S. dollars. This means more U.S. dollars flow out of U.S. than flow in. The effect of this is U.S. has currency deficit as its dollars are in bank accounts of other countries. Mr Lavrov said: "I'm confident that grave abuse of the role of U.S. dollar as global reserve currency will result over time in weakening and demise of its role." China's currency the yuan is emerging as alternative trading currency. Africa's most populous nation Nigeria has already started trading using yuan.
