Is the American dollar truly on its way out as the global currency of reference? Many commentators, including Edward Hadas of France’s Le Monde newspaper, regard last week’s deal between China and Brazil to use their own currencies for bilateral trade to mark the beginning of the end for the U.S. dollar as the key currency for global exchange.
For Le Monde, Hadas writes in part:
“The omnipotence of the dollar remains a fact, but China and Brazil have agreed to take a small first step to challenge and then free themselves from it.’
“The idea of a world free of the grip of the dollar is gaining ground. Moscow and New Delhi could join the movement and allow the currencies of the BRIC (Brazil-Russia-India-China) to form the “4 R” bloc (real-ruble-rupee-renminbi). The end of the dollar’s reign may be slow. But it is nevertheless inevitable.”
By Edward Hadas
Translated By Mary Kenney
May 21, 2009
France – Le Monde – Original Article (French)
The omnipotence of the dollar remains a fact, but China and Brazil have agreed to take a small first step to challenge and then free themselves from it.
Beijing and Brasilia have agreed to fix the rates of bilateral trade in their respective currencies – the renminbi (or yuan) and the real. If this test works, the global supremacy of the greenback will be weakened. [Brazil will pay for Chinese goods with reals – and China will pay for Brazilian goods with renminbi].
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