De-dollarization agendas could spike South Korea, Singapore and China’s currency usage: Goldman Sachs
Global central banks may look beyond the US dollar after US President Donald Trump slapped countries with tariffs, posing geopolitical risks and economic uncertainty.
According to analysts at Goldman Sachs Group Inc., the currencies in Asia, such as South Korea Won, the Singapore dollar, and the Chinese Yuan, can benefit most of the de-dollarization agendas.
In an April 30's record written by strategists Danny Swannaruti and Rina Jio, Goldman Sachs said the dollar and euro are continuing to lead global reserves, but allocating “non-traditional” properties may be able to reach them.
“We believe that the variety -away from the dollar must continue, as this trend has been well hidden in the past decade“The analysts write.
China, South Korea and Singapore can attract a lot of reserves
According to analysts, South Korea's demand for money could have increased due to the country's expected entry into the FTSE World Government Bond Index in 2025, opening doors to more international bond investors.
The US dollar Putted Of the 1,420.94 against South Korea who won Wednesday, a downtick of 11.20 won or 0.78% from the previous trading session. Over the past four weeks, the dollar has dropped by 3.54% against the winner. However, on a year-on-year basis, the greenback is up to 3.14%.
Since March 30, the USD has Poor By 2.80% against the Singapore dollar, and in the last 12 months, it dropped by 4.01%.
In East Asia, Chinese president Xi Jinping and his administration have pleaded with other countries and changes policies to boost the international use of Yuan in the greenback. In early April, the People's Bank of China (PBOC) expanded Cross-border financial services in Vietnam and Cambodia by China Unionpay, a Central Bank-controlled financial service network.
Unionpay expansion includes QR-code-based payment systems that allow tourists and small businesses to use QR codes instead of dollars in daily transactions. At the same time, PBOC swap lines with PBOC replacement lines with foreign central banks reached a record 4.3 trillion yuan ($ 591.2 billion) in February.
The PBOC has also pledged to strengthen the owner of the international payment system, CIPs, and advance the integration of blockchain technology, the foundation of China's digital yuan.
Meanwhile, meanwhile Bloomberg's Dollar Index It has dropped more than 7% since peaking in February, after demand throughout the $ 7.5 trillion-every-day foreign exchange market weakened during the day.
“T.He is United States weapon weapon weapon has a doubt in US asset safety“E. Yongjian, Vice General Manager of the Bank of Communications Department of Communications, said.”That is, the yuan assets have become attractive, and help expand Chinese currency use. “
Trump 2.0 tariffs separate USD dominance
Since returning to the office on January 20, President Donald Trump has implemented the highest tariff barriers around the US economy for a century. His targets are most countries doing business in China, a strategy that economists believe will hurt the dollar dominance as a currency reserve.
At a recent -Press conference, PBOC Vice Governor Lu Lei said the US trade protection and disputes forced Chinese companies invested abroad to move the shop away to the west.
“Unilateralism, protectionism … and higher tariffs affect the global supply chain”He counts.
Officials within China's National Development and Reform Commission, such as researcher Qu Fengjie, see a scenario in which China Outpaces The US in global influence. In his so -called “East Rising and West refusal,” Fengjie predicts that cutting the supply chain will favor a stronger yuan and help China “break the former condemnation of the international financial system.”
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