US dollar forecast to lose global dominance

The US currency’s dominant position in the world economy will gradually decline over time, the head of the Philippines' central bank, Felipe Medalla, told RIA Novosti on Wednesday.

Medalla called for the creation of a multi-currency world, although he noted that the dollar still has an advantage globally due to the enormous market for US government bonds.

“We want a multi-currency world, but so far other currencies do not have the necessary international markets to support. This is the advantage of the US dollar – there’s a very large market for government securities,” Medalla told RIA on the sidelines of the IMF-World Bank’s Spring session in Washington.

“I think over time the dollar will be less and less dominant,” the central banker predicted.

The process of de-dollarization has been gaining momentum across the globe as more countries seek alternatives to the US currency. Russian President Vladimir Putin stated recently that the dollar and other Western currencies will inevitably lose their leading position in global cross-border transactions as the current policies of Western states undermine the supremacy of the dollar and euro in international payments.

According to latest data from the IMF, the dollar's share of global foreign exchange reserves slid to 58.36% last year, extending a two-decade decline. The greenback’s share was down by 0.44 percentage points, which was the largest drop of any currency in the composition of official forex reserves as tracked by the IMF.

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