De-dollarization has started, but the odds that China's yuan will take over are 'profoundly unlikely to essentially impossible'
De-dollarization has begun as recent trade deals elevate rivals, but the greenback is likely to remain a global currency, according to economist Peter C. Earle.
"First, barring a truly extraordinary event or series of developments, a scenario in which the dollar is no longer used in international trade is highly unlikely," he said. Meanwhile, despite China's efforts to elevate the yuan on the world stage and replace the dollar, Earle is highly skeptical. Earle's note comes as China has actively established agreements with countries such as Kazakhstan, Pakistan, Laos andThe renminbi has overtaken the dollar as the most used foreign currency in Russia, especially as the countryBut the yuan is poorly suited to become the world's central currency, as it is virtually pegged to the dollar, Earle said. The yuan is only allowed to trade in a 2% range against a midpoint determined daily by China's central bank.
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