But in recent times, some countries have made the decision to de-dollarize.
De-dollarisation refers to countries reducing their dependence on the U.S. dollar as a reserve currency, medium of exchange, or as a unit of account.
Developed economies like China and Russia currently trade in their own currencies.
Also, Brazil has dropped the dollar in bilateral trade.
According to geopoliticaleconomy.com, the UAE is selling China its gas in yuan through a French company.
On the other hand, Southeast Asian nations in ASEAN are de-dollarizing their trade and promoting local payment systems.
Currently, an African country, Kenya, is buying Persian Gulf oil with its own currency.
With Ghana in perspective, how long could it take for Ghana to follow this path?
Ghana’s current economic crisis is largely due to the fact that it has been shut out of the international capital market.
This means that the inflow of foreign currency, especially the dollar, has reduced significantly. The government has, however, been relying heavily on Treasury bills.
De-dollarization could be a solution to the depreciation of Ghana’s currency in the long run.
This is because trading in one’s own currency reduces one’s exposure to currency risks and external global shocks.
Source: www.ghanaweb.com
