Browsing: Death of the dollar

• Tanzania and India have agreed to trade in local currencies weaning off the use of the US dollar.
• There are advantages of using local currencies in trade versus the traditional dollar.
• Tanzania and India have also agreed on military, maritime, and space technology cooperation.

India’s Ministry of Foreign Affairs Secretary Dammu Ravi has met with Tanzania’s President Samia Suluhu Hassan with reports emerging that the two leaders have among other things, agreed to trade in Rupees, the sub continent’s local currency.

The decision implies that the two countries, with long-running business ties, will effectively wean off using the king dollar as their ‘gold standard’, instead embracing the Indian Rupee as their common currency in exchange for value.

“When international transactions are denominated in local currencies, countries can avoid currency fluctuations and the associated risks. This stability helps to mitigate exchange rate volatility, reducing uncertainty and facilitating more accurate planning …

Already, China, Russia and Pakistan are laying out plans to start conducting bilateral trade and investment while issuing bonds in local and national currencies instead of the US dollar.

The eight-member countries of the Shanghai Cooperation Organization (SCO) are to finalise a road map introducing a system of mutual settlement of national currencies.

Other SCO members include India, Kyrgyzstan, Tajikistan and Uzbekistan while observer countries Iran, Afghanistan, Belarus and Mongolia are looking to become regular members of the SCO.

With the covid-19 coronavirus pandemic, it seems that the world is realigning itself for a new way of doing business.…