Brics: the mighty dollar is secure for now

{"text":[[{"start":11.28,"text":"Gripes about the greenback are nothing new. "},{"start":13.822,"text":"A French finance minister sniped at the “exorbitant privilege” its hegemony conferred on the US nearly six decades ago. "},{"start":20.127,"text":"Geopolitical shifts present an opportunity to challenge the dollar’s dominance. "},{"start":24.194,"text":"Witness the Brics development bank’s drive to lend in local currencies. "},{"start":27.973999999999997,"text":"Its goal is to offer an alternative to the US-based financial order. "}],[{"start":32.2,"text":"Discontent is understandable. "},{"start":34.367000000000004,"text":"Sanctions on Russia highlighted the risks of holding foreign reserves in dollar-denominated assets. "},{"start":39.547000000000004,"text":"Currency fluctuations, notably the dollar’s recent rise to a 20-year high, can cause real damage. "},{"start":45.527,"text":"A 10 per cent rise in the dollar cuts emerging economies’ output by 1.9 per cent after a year, says the IMF. "}],[{"start":53.52,"text":"Principal reserve currencies have suffered before, for example the British pound’s decline after the first world war. "},{"start":59.837,"text":"A shift away from the dollar could weaken the currency, raise US interest rates and reduce demand for US Treasury securities. "},{"start":66.467,"text":"Some $7.4tn, or 31 per cent, of Treasuries were owned by foreign investors at the end of last year. "},{"start":73.59700000000001,"text":"The market’s insouciance about the US debt burden would quickly turn. "}],[{"start":78.32000000000001,"text":"Yet an overthrow of the dollar is unlikely. "},{"start":81.11200000000001,"text":"It owes its dominance to network effects, the depth of US capital markets and the rule of law. "},{"start":86.34200000000001,"text":"It has a hefty 58 per cent share of global official foreign reserves, despite a drop of 13 percentage points since 2000. "},{"start":93.63400000000001,"text":"It dominates international banking and global trade. "}],[{"start":97.48,"text":"Russia has pivoted to the renminbi, which now accounts for 16 per cent of its export payments. "},{"start":103.22200000000001,"text":"But other Brics countries, particularly India, are wary of Beijing’s potential dominance. "},{"start":108.227,"text":"That plus currency controls makes them nervous. "},{"start":111.019,"text":"Their mooted development of a common currency is a non-starter. "}],[{"start":114.63,"text":"Nonetheless, the US should not be complacent about the greenback’s primacy. "},{"start":119.134,"text":"Sanctions that weaponise the dollar should be used sparingly, with global financial stability kept in mind. "},{"start":124.789,"text":"The dollar’s dominance carries responsibility as well as privilege. "}],[{"start":null,"text":""}],[{"start":128.29999999999998,"text":""}]],"url":"https://creatives.ftacademy.cn/album/119724-1692760120.mp3"}