There are growing concerns that the US dollar’s waning trust could destabilize the global economy this year. This view comes from Zhu Min, a former deputy director of the International Monetary Fund and a former deputy governor of the People’s Bank of China. He argues that the dollar’s share of worldwide foreign exchange reserves has slipped to about 57 percent, down from roughly 70 percent in the past. In contrast, gold, the euro, and the yuan are gaining prominence, signaling market sentiment that the dollar may be losing its dominance.
Zhu also notes that Washington’s approach to monetary policy—particularly the pace of Federal Reserve rate cuts—will be crucial for stabilizing financial markets in the coming year. He cautions that if the speed of rate reductions diverges from the underlying inflation trajectory, new uncertainties could arise.
China’s leadership, under President Xi Jinping, has emphasized the goal of developing a "strong currency" that can play a major role in international trade, investment, and foreign exchange markets, with the aim of achieving global reserve currency status for the yuan.
As de-dollarisation accelerates, investors are increasingly looking at alternatives such as gold and opportunities in emerging markets—especially China—as they seek to diversify away from dollar-denominated assets amid concerns about the United States’ long-term fiscal sustainability.
