Western Sanctions May Put US Dollar Hegemony at Risk

US DollarInternationalIndiaAfricaThe US Treasure secretary also insisted that no country in the world, other than the United States, has the “institutional infrastructure that would enable its currency to serve the world” like the US dollar.More than a year after the United States and its allies imposed numerous economic sanctions against Russia over the escalation of the conflict in Ukraine, US Secretary of the Treasury Janet Yellen has stated the obvious: the sanctions may threaten the hegemony of the US dollar, the world’s reserve currency.”There is a risk when we use financial sanctions that are linked to the role of the dollar that over time it could undermine the hegemony of the dollar,” she said during an interview with a US media outlet.Yellen, however, claimed that the US dollar is “used as a global currency for reasons that are not easy for other countries to find an alternative with the same properties.”She went on to boast that, other than the United States, there is no other country in the world that has the basic “institutional infrastructure that would enable its currency to serve the world” like the US dollar, and that sanctions are still an “extremely important tool.”EconomyAs Dollar Demand Shrinks, US Deficit Headache Swells14 April, 13:32 GMTWhen asked during the interview whether Russian assets in the US, which were frozen in the wake of the launch of Russia’s special military operation in Ukraine in February 2022, might be appropriated to be used for Ukrainian reconstruction, Yellen claimed that Moscow “should pay for the damages” it has allegedly inflicted upon Ukraine.She admitted, though, that there are “legal constraints on what we can do with frozen Russian assets, and we’re discussing with our partners what might lie in the future.”


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