John Smith spoke to the Financial Times about the potential for backlash against U.S. currency as countries around the world respond to the dramatic move by the United States and its allies to freeze Russia's foreign currency reserves.
"The sanctions have been earth-shattering," John said. "They've broken the mold."
John pointed out that "the death knell of the U.S. dollar in the international economy has been sounded every year" since roughly 2008, when Washington first blocked Iran from using the U.S. dollar for its international energy transactions. But nothing tangible has ever come from it.
"There's been a lot of hoopla ever since about the U.S. dollar losing its status as the reserve currency and the currency of choice in the energy markets and in the international economy, [but] we have not seen that occur," John said. "The U.S. dollar has continued to remains strong as a source of stability in international financial transactions, and that is likely to continue even after the dust settles on the Ukraine war that Russia has unleashed."
Read the full article (subscription may be required).
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
© Morrison & Foerster LLP. All rights reserved