Monday, January 30, 2023

Russia and Iran - Threatening the Role of the U.S. Dollar Reserve Currency

Russia and Iran have now officially paved the pathway to avoiding Western-based sanctions which have long been used, primarily by Washington, to punish pariah nations for what it deems "inappropriate behaviours.  This move may also ultimately lead to the end of the U.S. dollar as the world's reserve currency and reduce the importance of the SWIFT global payments system which Russia was banned from using in February 2022.


Here is the announcement from the Islamic Republic News Agency:


...and from Mehr News:



The original MOUs were signed back in May 2022 as shown here:



As well, in a July 2022 meeting between the governor of the Central Bank of the Islamic Republic of Iran and the head of the Central Bank of Russia, the two nations implemented MOU's on the development of relations in the financial and banking sectors:


Both nations have now taken measures toward avoiding the punishing restrictions that have been placed on their respective economies and, since they are using their national currencies to settle both trade and energy payments, are clearly moving to threaten role of the United States dollar role as the world's dominant reserve currency.  As well, putting the rising influence of the BRICS nations into the equation, the recent announcement that Egypt was joining the BRICs New Development Bank (NDB) as shown here:


...and the new nations seeking to join BRICS as shown on this graphic: is increasingly appearing that the global sanctions regime that has been spearheaded by Washington has led to a situation which could ultimately impact the importance of the United States and the West in general in global geopolitics.


Imagine that, first-order thinking by the political leadership of the West is resulting in a cascading series of unintended consequences.

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