Brace Yourself: De-dollarization is Gaining Speed

In this article, Alain Freymond, our Group Chairman, and Ahmad Saidali, our Group CEO, share their insights on the global decrease in demand and the falling value of the dollar.

Decrease in global demand and fall of the Dollar

The world is witnessing a significant shift in the way commodities are traded globally, and this change is not limited to just goods and services. The process of de-dollarization is currently gaining momentum as China increasingly utilizes the yuan for international transactions. More and more countries are joining this trend and are willing to let go of the dollar, including Saudi Arabia, which had committed to using the dollar for oil transactions for 50 years. Currently, almost fifty countries are aligning themselves with this movement, which could potentially upset the existing balance and threaten the greenback's dominance in the international financial system.

We foresee a number of negative long-term trends for the United States, the first of which is the depreciation of the dollar. With the expected decline in global demand for the greenback, the value of the dollar is expected to decrease. Although the majority of dollars are within the United States, a significant amount is held overseas. The growing use of alternative currencies, which challenge the supremacy of the dollar, will result in a decrease in demand for the dollar outside the United States, both for the purchase of goods and services and as monetary reserves, especially in favor of the yuan and gold. Non-domestic investors will no longer use a portion of the dollars, which will not be "recycled" into American banks or Treasury bonds. The "end" of petrodollars could have a significant impact on the depreciation of the greenback.