Ghulam Haider Sheikh
In 1931, due to the severe financial crisis in global banking, the world economic system was shaken, the American strategy was behind this financial banking crisis. Large-scale lending to European allies led to the rise of the US dollar in the market, earlier in the early 20th century Britain’s currency, the pound sterling, was considered the most important international currency, the second and third most important. The German “Mark” and the French “Franc” were considered the most important currencies in the world, during which the United States made rapid economic development.
At the end of World War II, the superpower Great Britain was in debt to the United States, and the United States was waiting for that time to press Britain to repay the debt, but the war had bankrupted Great Britain. And he spent all the loan money on the Allies, the Allies were unable to repay the loan in view of their poor economic situation, there was no possibility of repayment of the loans given by the international banks, the debt pressure. As the distance between the debtor countries widened, the producing countries devalued their local currencies, increasing their bad debts and reinforcing the trend of declining imports, which brought economic chaos to a dangerous level in 1944. 730 delegations from 44 allied countries gathered at Bretton Woods in the US state of New Hampshire to decide global economic and financial issues.
The delegations of all countries unanimously agreed to a formal system of fixed exchange rates for currencies that were systematically recognized by the U.S. dollar as equal to a certain amount of gold, after which the dollar became a strong currency. But it emerged and became widely used in international trade and formally monopolized the global economy.
After the United States established the monopoly of the dollar, it used the dollar as a weapon for its own interests by imposing economic sanctions on rivals and rival countries. For the past few years, European and Asian countries have replaced the US dollar with their local currencies for bilateral trade. These countries aim to strengthen bilateral relations by ending dependence on the dollar. In the “multipolar world”, US allies Brazil and Japan have recently increased their bilateral currency trade. Has joined the trend, so the end of the monopoly of the dollar and the domination of the US financial system by trading in the local currency of the countries is not far off.
According to experts, in the future, at least in the international trade between Asia, Africa and South America, the rule of the dollar seems to be ending. As a result, the rate of inflation exceeded 100%, while in 1989 Argentina’s conditions were very bad, with a 3079% annual increase in the prices of daily commodities, while in 1990, the poverty level was recorded after a 2314% increase. In the same year, inflation in Argentina became uncontrollable like in Pakistan.
This month, ASEAN member states established a currency system for local trade transactions that would promote trade in local currencies instead of dollars, not new and not the first time such a move has taken place. Different countries have agreed to use the local currency instead of the dollar bilaterally and multilaterally. Earlier, several regional and non-regional countries including Saudi Arabia, Iran, Brazil, Pakistan, Russia and China have agreed bilaterally or multilaterally. Multilaterally agreed to trade imports and exports in local currency instead of dollar, the move of these countries to trade in local currency against dollar has led to appreciation of local currency.
India has started buying Russian oil in UAE dirhams instead of dollars. According to the Malaysian Prime Minister, his country cannot rely on dollars for investment, so Malaysia has opened a rupee account in the Indian Union Bank to trade in rupees without dollars. Preferred, China’s currency is the most widely used international currency and has overtaken the dollar in terms of trade for the first time in history, with China trading at 48.4% in March compared to the US dollar at 46.7%. In terms of payments, local currency trading is challenging the dominance of the US dollar.
