The US dollar may have a serious competitor

Reflecting on the prospects of the US dollar on the world stage, some analysts suggest that soon the US currency may have a serious competitor created by large Asian countries such as India, China, Japan and South Korea.

To date, the dollar continues to be the world's currency and is used in many countries along with local currencies. In addition, approximately 40% of the world's debt is denominated in dollars, which gives the US huge privileges and important control levers.

The dominance of the dollar on the world stage also means that the United States is a global lender of last resort. About 60% of the world's foreign exchange reserves are held in the US currency, while the euro, with its 20%, occupies a distant second place. Moreover, almost 90% of all foreign exchange trading also involves the dollar.

However, some experts believe that the strength of the dollar is gradually waning. And a new competitor of the greenback may be the actively discussed South American common currency called «sur», which they want to use in trade between Brazil and Argentina. In the event that sura manages to smooth out the roughness of illiquid and volatile local currencies, other South American countries may join its use, and this will greatly shake the dollar's position.

Additional pressure on the dollar is also exerted by rumors that China and Saudi Arabia plan to buy and sell energy resources not in dollars. The Saudis have become the largest supplier of oil to China: in December alone, Beijing bought 350 million barrels of oil. Analysts believe that if a rival oil currency created by Asian countries appears, the dollar will have to significantly weaken its position.