Vladimir Putin takes aim at the US dollar's dominant position as the world's reserve currency

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Vladimir Putin takes aim at the US dollar's dominant position as the world's reserve currency
Russian President Vladimir Putin speaks during his annual meeting with participants of the Valdai Discussion Club on October 5, 2023 in Sochi, Russia.Contributor/Getty Images
  • Vladimir Putin decried the US dollar's status as the world's reserve currency in a new interview.
  • Putin took particular issue with America's practice of using the dollar to enact economic sanctions.
  • "To use the dollar as a tool of foreign policy struggle is one of the biggest strategic mistakes made by the US political leadership," Putin said.
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Russian President Vladimir Putin took aim at the US dollar's status as the world's reserve currency in his interview with Tucker Carlson this week.

Putin took particular issue with America's practice of using the dollar to enact economic sanctions, like banning foreign transactions with certain countries and individuals.

"To use the dollar as a tool of foreign policy struggle is one of the biggest strategic mistakes made by the US political leadership," Putin said.

He continued: "It is the main weapon used by the United States to preserve its power across the world. As soon as the political leadership decided to use the US dollar as a tool of political struggle, a blow was dealt to this American power. It is a stupid thing to do and a grave mistake."

In hopes of damaging its economy, the US has enacted severe sanctions against Russia after it invaded Ukraine in February 2022. Economic trade between the two countries has ground to a halt, and Russia and its citizens are restricted from transacting in US dollars.

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Putin said that the Russian ruble and Chinese yuan have largely replaced the US dollar in his country's trade activities, and suggested that America's economic sanctions are hurting its economy.

"I think it is complete foolishness from the point of view of the interest of the United States itself and its tax payers, as it damages the US economy, undermines the power of the United States across the world," Putin said.

Putin's claim that America's use of the dollar to enact economic sanctions is damaging its economy is far-fetched given recent data, as the US economy's growth has accelerated considerably since it enacted sanctions against Russia in 2022.

Putin also said that China's yuan could have a bigger role in replacing the dollar on a global stage, though that has yet to pan out in a significant way.

While the US dollar has seen its dominance as the world's reserve currency wane over the past two decades, it's still the leader by a long shot.

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According to the IMF, the US dollar had a 59% share of global currency reserves as of the third quarter of 2023, which is down from 70% in 1999.

After the dollar, the euro has a 20% share, and the Japanese yen and British pound have a combined 10%. Meanwhile, the Chinese yuan represents just 2.4% of global currency reserves.

That's just one reason why some Wall Street strategists expect the US dollar to remain king for the foreseeable future.

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