[European Central Bank President: The Dominance of the US Dollar is Becoming Uncertain]
On May 26th local time, European Central Bank President Christine Lagarde delivered a speech at a forum in Berlin. Lagarde stated that the current international monetary system based on the US dollar is becoming uncertain, and Europe needs to reform in many aspects to reduce its impact from changes in the international order.
European Central Bank President Christine Lagarde said that over the past eighty years, openness and multilateralism have been the foundation of global economic prosperity, and the United States has also provided support for this. For a long time, the US dollar as the main global reserve currency has been the cornerstone of this system. However, this monetary system has begun to fundamentally become uncertain.
Lagarde further explained that current global multilateral cooperation is being replaced by zero-sum games and bilateral power struggles, openness is giving way to protectionism, and even the cornerstone of this system - the dominance of the US dollar - has become uncertain.
Due to the recent unpredictable economic policies of the United States, global investors have been reducing their holdings of US dollar assets over the past few months, and many have turned to investing in gold. Lagarde said that the proportion of the US dollar in global foreign exchange reserves is 58%, which is the lowest level since 1994, more than 30 years ago. At the same time, central banks have been stockpiling gold at an unprecedented rate.
Lagarde believes that this turning point also contains risks. She said that any change in the international order that leads to a decline in world trade or the division of economic blocs will have an adverse impact on the European economy. But with the right policy response, the changing situation may also provide the possibility for the euro to play a greater role on the international stage in the future.
(Source: CCTV News)
[Editor: Chen Ming]
Original Article: https://www.toutiao.com/article/1833234921036807/
Disclaimer: This article only represents the views of the author.