In terms of global liquidity and ubiquity, by far the most utilized currency is the U.S. dollar – known widely as ‘the world’s reserve currency’ – because every country on the planet keeps large sums of dollars in reserve in order to make hard currency trades on majority commodities like oil, gas, grain and gold. That’s why the U.S. dollar makes up roughly 64% of all known central bank foreign exchange reserves. This advantage is what gives Washington unprecedented power and leverage in international affairs.
The next closest reserve currency is the euro at 19.9% of known central bank foreign currency reserves.
Below is a list of the ten most traded currencies in 2018:
Undoubtedly, the U.S. dollar will remain the dominant currency in the near to midterm, and maybe even in the long-term. The only thing which could seriously threaten this status quo is if major global and regional markets are able to move their oil and gas trades from the dollar to the euro. Once this happens, then the financial center of gravity will begin to swing away from the U.S. dollar and towards other baskets of currencies.
Presently, the largest common market on the planet is the EU, and if they enter into a commercial agreement with Russia to trade in euros – then this would spell serious trouble for the U.S. – and would likely illicit a stern reaction by Washington. Is it enough to lead to war? This remains to be seen, but judging by past efforts from states attempting to move off of the dollar for hard currency transactions on commodities like oil (Iraq and Libya, for example), this could be a cause for concern.
RT International reports…
Since both Russia and the EU are not dollar-based, it would be more beneficial for both to switch to euro in energy resource trading, Russian Economic Development Minister Maxim Oreshkin said in an exclusive interview to RT.
One of the leading figures in charge of Russia’s economy, Oreshkin, sat down with RT correspondent Ilya Petrenko, to discuss a wide range of economic issues – from the current state of the ruble to cooperation with foreign players.
The minister believes Russia-EU economic ties are currently experiencing a real “renaissance,” adding that despite all the political “buzz” the number of bilateral projects is rapidly increasing. Meanwhile, Moscow fully backs the bloc in its recent initiative for wider use of the euro in the international arena, especially in the energy industry, said Oreshkin.
If you look [at Russia’s relations with the EU]…you will see cooperation and support from Russia in the current plan of increasing the role of the euro which was recently introduced by the European Commission,” the minister told RT.
The EC issued its proposal to boost the common European currency on December 5 in an apparent bid to challenge the dominance of the US dollar. The Russian economic development minister stressed that while for Russia the share of the dollar in trade is declining, it seems irrelevant to continue trading with its EU partners in dollars, given that both Moscow and European states do not use it as a national currency.
“Russia is not a dollar country, Europe is, you know, not dollar based… but for some reason we’re trading energy resources in dollars,” Oreshkin said. “So I believe we should think about switching at least to the euro as a more common currency both for Russians and the Europeans.”
During the interview, the minister also noted that the trade turnover between Russia and Europe saw “double digit” growth over the past two years – 23 percent in 2017 and 21 percent in 2018. At the same time, Moscow and its European partners are engaged in a vast number of projects, including large scale ones, such as the construction of new nuclear reactors in Hungary and Finland, as well as the Nord Stream 2 natural gas pipeline.
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