Daily Times

The Coordinator to Federal Tax Ombudsman and Chairman Kyrgyzstan Trade House Meher Kashif Younis Sunday underlined the importance of currency diversity with less dependence on US dollar.

He asked for promoting global and regional trade in currencies of friendly countries to arrest the fragile economy from tumbling down. Talking to a delegation of industrialists and traders led by Faran Shahid he said it’s high time for Pakistan and dire need of hour to explore on top priorities the avenues of trade in currencies of friendly countries especially with regional economic players to ease the pressure on Pak currency.

Besides, he stressed the need for promoting barter trade worldwide to help boost our delicate economy.

He said by reducing their dependence on the U.S. dollar, countries can reduce the impact of these imbalances on their economies as the BRICS countries have also signed bilateral currency swap agreements, which allow them to trade in their own currencies rather than the U.S. dollar. These agreements have reduced the need for the countries to hold large reserves of U.S. dollars and promoted currency diversity in the global economy,he added.

He said recently China and Brazil reached a deal to trade in their own currencies, instead of the U.S. dollar, which has been the dominant currency in world financial systems since the end of World War II. He said the abuse of economic sanctions by the Us government has also played a significant part in de-dollarization as many countries have been subject to U.S. sanctions, which can have a significant impact on their economies.

By reducing their dependence on the U.S. dollar, these countries will minimize the impact of U.S. sanctions.

Meher Kashif Younis said in addition, the rise of other global powers such as China and the increasing use of alternative currencies such as the euro and the Chinese yuan would challenge the U.S. dollar’s dominance in the future. He said the countries that hold significant amounts of dollars in their foreign reserves are exposed to currency risk, which can be costly and difficult to manage.