The debate on the use of US dollar as an international reserve currency has continued after the Ukraine conflict.
Former president Thabo Mbeki entered the fray recently when he said there was a global discussion on the future of the dollar.
He said China, India, many African countries and those in Latin America had been questioning the use of the US currency as a trading currency in the world.
Mbeki, who was addressing a lecture at Unisa recently, said if two countries who did not use the dollar as their currency got into trade agreements there was no use in using it.
China has apparently started using the yuan when trading with Russia.
Russia has been slapped with sanctions by the US and other Western countries after it invaded Ukraine in February last year.
Mbeki said it appeared that the sanctions imposed against Russia may have not worked.
“That effort to impose sanctions on Russia and have it isolated globally has not worked because countries like China, India, many African countries and many countries in Latin America have not joined that campaign. Part of what has risen in that context is the question about the use of the dollar as an international reserve currency. It’s clear this is part of what is happening that many countries are saying in order to avoid this consequence of the imposition of sanctions by the US on the basis that we are using their currency, let’s walk away from the dollar,” said Mbeki.
“There is a global discussion taking place about that. Some of it is bilateral. When Russia trades with China there is no reason why they must trade in dollars. Even in India they are saying the same thing,” said Mbeki.
He said globally there was a discussion to not use the dollar when doing business.
They must find an alternative means of trade to avoid being subjected to US power through its currency.
The US was using its dollar to impose its will on other countries.
He said discussion in the world were still going on and he did not know where it would end.
But countries are raising it.
“Globally, there is a discussion that is taking place to say we must find alternative means of trading among ourselves and not subject ourselves to a situation where there is one currency in the world, which becomes a global reserve currency because it gives the country, which is the issuer, the US, the power to impose its will on everybody because we are dependent on the dollar,” said Mbeki.