De-dollarisation was natural, but Trump will accelerate it

De-dollarisation is a natural process of stabilisation as the dollar's presence in world markets — in foreign-exchange transactions (88.5%), trade invoicing (50%), SWIFT payments (42.3%), international debt securities (42%) and cross-border loans (32%) — far exceeds the United States (US) economy's share of both global Gross Domestic Product (less than 25%, down from 45% after World War II) and international trade (less than 12%).

- Jamal Mecklai

Indeed, the share of the dollar in global central bank foreign currency assets has been falling steadily and is now down to 59% from over 70% in 2001 (and 85% in 1977). About 25% of this decline was the result of some countries (Singapore and Malaysia, for instance) including China's renminbi (RMB) in their reserves, with the balance being made up by shifts into other non-G7 currencies (Australian dollar, Canadian dollar, Swedish krona, South Korean won, among others).

Also, and very significant, there has been an overall decline in foreign currency assets (by about 9%) due to a substantial change in central banks' demand for gold. Global central banks already own nearly 37,000 tonnes of gold — about 17% of all the gold ever mined — and have been buying at a rate of over 1,000 tonnes for each of the last three years.