US Sanctions May Risk Hegemony of Dollar, Says Treasury Secretary Yellen

Economic sanctions imposed on Russia and different international locations by the United States put the greenback’s dominance in danger as focused nations search out another, Treasury Secretary Janet Yellen stated Sunday.

“There is a threat once we use monetary sanctions which can be linked to the function of the greenback that over time it may undermine the hegemony of the greenback,” Yellen said on CNN.

“Of course, it does create a desire on the part of China, of Russia, of Iran to find an alternative,” she informed the community’s Fareed Zakaria in an interview. “But the greenback is used as a worldwide foreign money for causes that aren’t straightforward for different international locations to search out another with the identical properties.”

The robust US capital markets and rule of law “are essential in a currency that is going to be used globally for transactions,” she added. “And we haven’t seen some other nation that has the essential… institutional infrastructure that might allow its foreign money to serve the world like this.”

Yellen noted that sanctions are an “extremely important tool,” all of the extra so when utilized by the United States and its allies as “a coalition of companions performing collectively to impose these sanctions.”

Asked about the possibility of using frozen Russian assets to rebuild war-ravaged Ukraine after Moscow’s invasion, Yellen said that “Russia should pay for the damages that it’s caused.”

But she famous there are “authorized constraints on what we will do with frozen Russian belongings, and we’re discussing with our companions what would possibly lie sooner or later.”

Read all of the Latest Business News, Tax News and Stock Market Updates right here

(This story has not been edited by News18 employees and is revealed from a syndicated information company feed)