Economist Expects US Rating Downgrade to Accelerate De-Dollarization Process

Economists person warned astir the adverse interaction of Fitch’s U.S. standing downgrade connected the dollar. One expects the downgrade to “accelerate” the process of de-dollarization globally. Another stated that it whitethorn beryllium “a portion of the gradual diminution of the U.S. dollar system.”

Impact of Fitch’s Rating Downgrade connected US Dollar

Several economists person offered their perspectives connected the adverse effects stemming from Fitch Ratings’ determination to downgrade the semipermanent foreign-currency issuer default standing of the United States from AAA to AA+. Fitch Ratings is 1 of the apical 3 recognition standing agencies successful the U.S.

Citic Securities’ main economist, Ming Ming, told the Global Times connected Wednesday:

Amid the progressively analyzable geopolitical concern today, much and much countries person started the de-dollarization process and Fitch’s downgrade of the U.S. standing whitethorn accelerate that process.

In effect to Fitch Ratings’ downgrade, some the White House and Treasury Secretary Janet Yellen released statements expressing beardown disagreement with the decision. Yellen asserted that the alteration was “arbitrary and based connected outdated data” portion officials from the Biden medication called Fitch’s downgrade determination “bizarre and baseless.”

A increasing fig of nations globally are actively moving to alteration their dependence connected the U.S. dollar, peculiarly aft the U.S. weaponized its currency. Leading the efforts towards de-dollarization are the BRICS countries (Brazil, Russia, India, China, and South Africa). The economical bloc has been pushing for the usage of nationalist currencies successful commercialized settlements. De-dollarization is expected to beryllium among the large topics discussed astatine the BRICS leaders’ summit that volition instrumentality spot connected Aug. 22-24.

“The antagonistic effect of U.S. monetary argumentation connected the satellite system is precise important … immoderate countries person been severely wounded by the U.S. monetary tightening,” Lian Ping, main economist of Zhixin Investment, told the quality outlet.

The main economist added:

Fitch’s downgrade of its recognition standing whitethorn besides beryllium a portion of the gradual diminution of the U.S. dollar system.

Do you deliberation Fitch’s U.S. standing downgrade volition wounded the U.S. dollar’s dominance? Let america cognize successful the comments conception below.