Is it time for the world to end the ‘grandfathering’ of the US dollar?

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For the last one year, the strong position of the dollar against all the currencies prevalent in the whole world has increased the economic problems of other countries. The position of the dollar has always been strong in the global economy. In the 70s, 80 percent of the foreign exchange reserves of central banks around the world were in dollars, although at present it has decreased. But even today it is more than 60 percent in the central banks of the world.

While the share of Euro is just 20 percent. It is also worth noting here that the problem is not only the strong position of the dollar, but the kind of monetary policy being adopted in America is no less than bad news for the economies of the whole world. 

However, the whole world economy  is not solely responsible for the situation that the world is passing through. But the other side of the coin is that the dollar has left no stone unturned to make the situation worse. 

This is the reason that now once again the exercise to end the dominance of dollar on the world scene has intensified. This is not the first time that another currency has tried to replace the dollar.

But this time, this effort is not being made by any one country alone, but many countries of the world together are trying to find an alternative to the dollar and end its monopoly. 

A recent report titled ‘The Future of the Monetary System’ by Credit Suisse, a company working in the financial sector, has also emphasized the need to develop an alternative system to the dollar or a multi-polar monetary system. 

However, it has also been clearly stated in this report that currently no currency to replace the dollar is seen as a candidate, neither Euro nor any other. 

This is the reason why the idea of ​​creating a global currency is completely utopian at the moment, and would require very strong geopolitical cooperation to make it a reality. 

China and Russia have tried to end the dominance of dollar in the past too, but did not get success. In such a situation, it is bound to arise the question whether the power of dollar can be changed or it is wrong to think so. And if it is possible to do so, then what kind of steps we can take to get success?
 
On this question, economic affairs expert Manish Gupta says that in fact, due to the dominance of the dollar, America is the whole world. Wants to keep the reins in his hands. This is the reason why even after the introduction of Euro, it did not get the importance it should have. 

Manish  said that even today the dollar is the main currency of international trade and that is why whenever US policy makers take decisions in the interest of their country, it is obvious that the strengthening of the dollar will always be their agenda.  In such a situation, almost all currencies will continue to weaken against the dollar, which affects the international trade of that country. 

According to Manish Gupta  We have to understand that if the power of the world gets centralized and goes in the hands of 1 or 2 countries or an organization of these countries, then the politics of the whole world will also be affected.

He said that due to the Russia-Ukraine war, the dollar fluctuated and due to which the economy and currency of other countries were badly affected. The ups and downs in the dollar is nothing but tells the condition of the American economy, but why should the rest of the country and India be worried because of the condition there. That’s why the dominance of dollar must end. 

Answering what kind of steps India should take in this regard, Akash Jindal said that international trade should be promoted in rupees and it will not happen at once, nor will it replace dollar. But by taking small steps, India can promote international trade in rupees. This will strengthen the rupee’s position and will definitely affect the dollar’s position.

Talking about the efforts made by the central banks around the world to replace the dollar with some other currency and the role of India, Akash Jindal said that India must participate in such steps.< /p>

He said that 4 years ago such efforts were made by China but it did not get success, so we have to pay attention that the nations participating in such efforts will have their own interests. That’s why we not only have to keep an eye on other central banks but also have to move our currency forward. 

Reserve Bank has already brought a pilot project of digital rupee, so we have to be with everyone in such a way that our rupee can emerge as a strong currency.

Effect of dollar strength
Due to the strength of dollar, the rest of the currency becomes weak and in such a situation it has a bad effect on the world economy. The biggest effect that worries all countries is the cost of imports. An increase in the value of the dollar makes imported goods costlier, which increases inflation. 

On the other hand, due to the strengthening of the dollar, this payment becomes expensive for the countries which have to repay their debt in dollars and as a result, the financial pressure on these countries increases and their spending capacity decreases.
 < br />Due to all these reasons, now many countries together want to develop a multi-polar monetary system. There are many questions on whether this system will be visible on the ground. Presently, in view of the present circumstances, this system is considered necessary.

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