Features

Putting de-dollarization in perspective

Published

3 years ago

2023/08/6

By Rumeth Jayasinghe

In its simplest sense, de-dollarization refers to the global shift towards reducing reliance on the US dollar as a reserve currency, medium of exchange, or unit of account. Some experts frame this as a shift towards alternative currencies – that is, except the dollar – in global transactions.

For 80 years, the US dollar has remained the dominant currency, due to its wide acceptance and liquidity. This dominance was reinforced by the Bretton Woods Agreement in the 1940s.

Today the US dollar is used in 88% of all international transactions, making it the most used currency in trade worldwide. It is also the most held reserve currency. Important commodities such as crude oil and natural gas are priced in the dollar.

Despite its dominance in international trade, countries such as Russia and China have been persuading other nations to use alternative currencies, often in preference to their currencies, the yuan and the ruble respectively.

This call seems to have been heeded to some extent. In May 2023, Argentina announced it would pay for Chinese imports in yuan, while Brazilian President Lula De Silva called on the BRICS nations (Brazil, Russia, India, China, and South Africa) to create a common currency for global transactions.

Given the growth in the movement for de-dollarization, it is therefore important to understand its history and its background. Following the end of World War II, America’s global dominant role expanded, transforming New York into the world’s financial capital and the US dollar into the world’s most important currency.

In 1944, the Bretton Woods Agreement created an international foreign exchange system which made the US dollar the de facto global reserve currency. In line with the original Bretton Woods framework, all other currencies of the signatories would be pegged to the US dollar. In return, its value would be backed by gold reserves.

This agreement continued for more than 20 years until Richard Nixon decided to end the convertibility of the dollar in the early 1970s. That marked the end of the Bretton Woods Agreement.In 1973, the dollar was cemented as the petrodollar after the US and Saudi Arabia reached an agreement on the oil trade in exchange for military concessions.

The idea of establishing an Asian Monetary Fund emerged in 1997, after the economies of South-East Asia were devastated by an economic crisis. Japanese authorities proposed an Asian Monetary Fund, an institution which would help Asian economies to overcome financial challenges. At one level it posed a direct threat to the IMF.

Despite it being the first movement to call for a shift from the IMF, the idea of creating an Asian Monetary Fund never took off since it posed a challenge to US influence in Asia as well. It led to a disagreement between Japan and the US, and the US opposed the idea. Interestingly enough, China also did not approve of Japan’s proposal, mainly due to its strained relationship with Tokyo.

The BRICS currency

Recently, the BRICS (Brazil, Russia, India, China and South Africa) Group explored the possibility of creating a common currency for cross-border transactions, and reducing the influence of the dollar. In April 2023, Deputy Chairman of the Russian Duma Alexander Babakov announced that the BRICS nations were on the way to creating a new currency for global trade, which would be backed by commodities such as gold and rare earth materials.

This statement was backed by Brazilian President Lula da Silva, who contended, rather frankly, that he saw no reason why countries should base their trade on the dollar.

However, BRICS has not been united or unified on where it wants to go with de-dollarization. A few weeks ago, India distanced itself from calls for a BRICS currency, after Foreign Minister Jaishankar contended that India would not support such a proposal. In response a Chinese think-tank demanded India’s expulsion from the group, framing the country as the weakest link in it.

China – Brazil agreement

In the aftermath of Lula da Silva’s visit to China last March, Brazil and China signed an agreement to conduct bilateral trade in their national currencies, that is the Brazilian Real and the Chinese Yuan, thus eliminating the US Dollar in bilateral trade.

The agreement will enable the two countries to conduct and if possible expand trade amounting to USD 150 billion annually using their national currencies. Both countries have acknowledged that the agreement will help them reduce the transaction costs between and encourage investments.

The Russian invasion of Ukraine

The sanctions placed on Russia following its invasion of Ukraine last year have made it difficult for the country to use the US dollar in global trade. Russian banks have been removed from the SWIFT system and assets worth USD 630 billion have been frozen.

Such developments compelled Russian banks and businesses to move into alternative currencies. Since 2022, Russia has conducted most of its trade with China with the yuan. The country has also entered a rupee-ruble agreement with India.

Today, despite or more correctly because of sanctions, Russia trades with many countries and in many national currencies, including across the Middle East and the Europian Economic Union.

The US dollar’s share in global reserves is declining considerably. The Chinese yuan currently sits fifth in global reserve rankings, with 2.7% share. The main reason for the yuan’s rise has been Chinese investments and economic partnerships with other countries.

Other currencies like the ruble and Indian rupee have also seen growth, also due to agreements with other countries. Indeed, around 60 countries or more are trading with other countries using their respective currencies. Bilateral trade agreements have played a part in this process. A good example of this would be the agreement between Sri Lanka and Mauritius to use the rupee in bilateral trade.

The US’s response to the Russian invasion of Ukraine, through the expulsion of Russian banks from the SWIFT system and the freezing of Russian assets, raised fears of the US weaponizing the dollar. This strengthened an already active movement towards reducing reliance on the dollar, across the Global South in particular. Many countries have also expressed a desire to leave SWIFT, with Russia and China trying to create a new financial messaging system for international transactions.

De-dollarization can help countries shield themselves from the fallout of US monetary policy. Currently, for instance, any appreciation in the US dollar relative to other currencies, due to a decision by the US Federal Reserve to raise interest rates, can make it harder for countries to repay their foreign debt.

In that sense, de-dollarization increases the monetary autonomy of a country. It gives countries the leeway and the breathing space to boost economic activity. De-dollarization could also come in handy for economies such as China and India, as it can help such countries to boost their currencies and improve their development prospects while projecting their influence regionally and globally.

De-dollarization also has its disadvantages. When countries change from the US dollar to another currency, transaction costs come into play. Countries require proper banking infrastructure, finance regulations, and sufficient reserves to make de-dollarization a reality. It poses a threat to international trade as well, mainly due to uncertainties and disruptions in investment flows and international transactions.

Since a lot of international trade is conducted with the dollar, some countries would be reluctant to accept alternative currencies such as yuan or ruble in international transactions.De-dollarization has been ongoing for many years, but it has lately gained momentum rapidly. When dealing with this process, countries should understand its pros and cons before coming to a decision. They should act neutral and stay unbiased.

Though de-dollarization is being discussed widely, the dollar still acts as the king of all currencies. Whether its usage will drop or not remains highly debatable, if unpredictable. The growth of other currencies and the change in world order shows that the next five or six years will be crucial in deciding whether the US dollar will retain its dominant position in that order.

Rumeth Jayasinghe is a student who is currently pursuing economics for his higher studies. Having done his A Levels in 2022, he has a wide range of interests, including international relations, sports diplomacy, and music. He can be reached at rumethj17@gmail.com.

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Features

Crucial test for religious and ethnic harmony in Bangladesh

Published

20 hours ago

2026/02/12

Sahan Weerasooriya

A political protest that led to governmental change in Bangladesh mid last year. (photograph: imago)

Will the Bangladesh parliamentary election bring into being a government that will ensure ethnic and religious harmony in the country? This is the poser on the lips of peace-loving sections in Bangladesh and a principal concern of those outside who mean the country well.

The apprehensions are mainly on the part of religious and ethnic minorities. The parliamentary poll of February 12th is expected to bring into existence a government headed by the Bangladesh Nationalist Party (BNP) and the Islamist oriented Jamaat-e-Islami party and this is where the rub is. If these parties win, will it be a case of Bangladesh sliding in the direction of a theocracy or a state where majoritarian chauvinism thrives?

Chief of the Jamaat, Shafiqur Rahman, who was interviewed by sections of the international media recently said that there is no need for minority groups in Bangladesh to have the above fears. He assured, essentially, that the state that will come into being will be equable and inclusive. May it be so, is likely to be the wish of those who cherish a tension-free Bangladesh.

The party that could have posed a challenge to the above parties, the Awami League Party of former Prime Minister Hasina Wased, is out of the running on account of a suspension that was imposed on it by the authorities and the mentioned majoritarian-oriented parties are expected to have it easy at the polls.

A positive that has emerged against the backdrop of the poll is that most ordinary people in Bangladesh, be they Muslim or Hindu, are for communal and religious harmony and it is hoped that this sentiment will strongly prevail, going ahead. Interestingly, most of them were of the view, when interviewed, that it was the politicians who sowed the seeds of discord in the country and this viewpoint is widely shared by publics all over the region in respect of the politicians of their countries.

Some sections of the Jamaat party were of the view that matters with regard to the orientation of governance are best left to the incoming parliament to decide on but such opinions will be cold comfort for minority groups. If the parliamentary majority comes to consist of hard line Islamists, for instance, there is nothing to prevent the country from going in for theocratic governance. Consequently, minority group fears over their safety and protection cannot be prevented from spreading.

Therefore, we come back to the question of just and fair governance and whether Bangladesh’s future rulers could ensure these essential conditions of democratic rule. The latter, it is hoped, will be sufficiently perceptive to ascertain that a Bangladesh rife with religious and ethnic tensions, and therefore unstable, would not be in the interests of Bangladesh and those of the region’s countries.

Unfortunately, politicians region-wide fall for the lure of ethnic, religious and linguistic chauvinism. This happens even in the case of politicians who claim to be democratic in orientation. This fate even befell Bangladesh’s Awami League Party, which claims to be democratic and socialist in general outlook.

We have it on the authority of Taslima Nasrin in her ground-breaking novel, ‘Lajja’, that the Awami Party was not of any substantial help to Bangladesh’s Hindus, for example, when violence was unleashed on them by sections of the majority community. In fact some elements in the Awami Party were found to be siding with the Hindus’ murderous persecutors. Such are the temptations of hard line majoritarianism.

In Sri Lanka’s past numerous have been the occasions when even self-professed Leftists and their parties have conveniently fallen in line with Southern nationalist groups with self-interest in mind. The present NPP government in Sri Lanka has been waxing lyrical about fostering national reconciliation and harmony but it is yet to prove its worthiness on this score in practice. The NPP government remains untested material.

As a first step towards national reconciliation it is hoped that Sri Lanka’s present rulers would learn the Tamil language and address the people of the North and East of the country in Tamil and not Sinhala, which most Tamil-speaking people do not understand. We earnestly await official language reforms which afford to Tamil the dignity it deserves.

An acid test awaits Bangladesh as well on the nation-building front. Not only must all forms of chauvinism be shunned by the incoming rulers but a secular, truly democratic Bangladesh awaits being licked into shape. All identity barriers among people need to be abolished and it is this process that is referred to as nation-building.

On the foreign policy frontier, a task of foremost importance for Bangladesh is the need to build bridges of amity with India. If pragmatism is to rule the roost in foreign policy formulation, Bangladesh would place priority to the overcoming of this challenge. The repatriation to Bangladesh of ex-Prime Minister Hasina could emerge as a steep hurdle to bilateral accord but sagacious diplomacy must be used by Bangladesh to get over the problem.

A reply to N.A. de S. Amaratunga

A response has been penned by N.A. de S. Amaratunga (please see p5 of ‘The Island’ of February 6th) to a previous column by me on ‘ India shaping-up as a Swing State’, published in this newspaper on January 29th , but I remain firmly convinced that India remains a foremost democracy and a Swing State in the making.

If the countries of South Asia are to effectively manage ‘murderous terrorism’, particularly of the separatist kind, then they would do well to adopt to the best of their ability a system of government that provides for power decentralization from the centre to the provinces or periphery, as the case may be. This system has stood India in good stead and ought to prove effective in all other states that have fears of disintegration.

Moreover, power decentralization ensures that all communities within a country enjoy some self-governing rights within an overall unitary governance framework. Such power-sharing is a hallmark of democratic governance.

Features

Celebrating Valentine’s Day …

Published

20 hours ago

2026/02/12

Sahan Weerasooriya

Valentine’s Day is all about celebrating love, romance, and affection, and this is how some of our well-known personalities plan to celebrate Valentine’s Day – 14th February:

Merlina Fernando (Singer)

Yes, it’s a special day for lovers all over the world and it’s even more special to me because 14th February is the birthday of my husband Suresh, who’s the lead guitarist of my band Mission.

We have planned to celebrate Valentine’s Day and his Birthday together and it will be a wonderful night as always.

We will be having our fans and close friends, on that night, with their loved ones at Highso – City Max hotel Dubai, from 9.00 pm onwards.

Lorensz Francke (Elvis Tribute Artiste)

On Valentine’s Day I will be performing a live concert at a Wealthy Senior Home for Men and Women, and their families will be attending, as well.

I will be performing live with romantic, iconic love songs and my song list would include ‘Can’t Help falling in Love’, ‘Love Me Tender’, ‘Burning Love’, ‘Are You Lonesome Tonight’, ‘The Wonder of You’ and ‘’It’s Now or Never’ to name a few.

To make Valentine’s Day extra special I will give the Home folks red satin scarfs.

Emma Shanaya (Singer)

I plan on spending the day of love with my girls, especially my best friend. I don’t have a romantic Valentine this year but I am thrilled to spend it with the girl that loves me through and through. I’ll be in Colombo and look forward to go to a cute cafe and spend some quality time with my childhood best friend Zulha.

JAYASRI

Emma-and-Maneeka

This Valentine’s Day the band JAYASRI we will be really busy; in the morning we will be landing in Sri Lanka, after our Oman Tour; then in the afternoon we are invited as Chief Guests at our Maris Stella College Sports Meet, Negombo, and late night we will be with LineOne band live in Karandeniya Open Air Down South. Everywhere we will be sharing LOVE with the mass crowds.

Kay Jay (Singer)

I will stay at home and cook a lovely meal for lunch, watch some movies, together with Sanjaya, and, maybe we go out for dinner and have a lovely time. Come to think of it, every day is Valentine’s Day for me with Sanjaya Alles.

Maneka Liyanage (Beauty Tips)

On this special day, I celebrate love by spending meaningful time with the people I cherish. I prepare food with love and share meals together, because food made with love brings hearts closer. I enjoy my leisure time with them — talking, laughing, sharing stories, understanding each other, and creating beautiful memories. My wish for this Valentine’s Day is a world without fighting — a world where we love one another like our own beloved, where we do not hurt others, even through a single word or action. Let us choose kindness, patience, and understanding in everything we do.

Janaka Palapathwala (Singer)

Janaka

Valentine’s Day should not be the only day we speak about love.

From the moment we are born into this world, we seek love, first through the very drop of our mother’s milk, then through the boundless care of our Mother and Father, and the embrace of family.

Love is everywhere. All living beings, even plants, respond in affection when they are loved.

As we grow, we learn to love, and to be loved. One day, that love inspires us to build a new family of our own.

Love has no beginning and no end. It flows through every stage of life, timeless, endless, and eternal.

Natasha Rathnayake (Singer)

We don’t have any special plans for Valentine’s Day. When you’ve been in love with the same person for over 25 years, you realise that love isn’t a performance reserved for one calendar date. My husband and I have never been big on public displays, or grand gestures, on 14th February. Our love is expressed quietly and consistently, in ordinary, uncelebrated moments.

With time, you learn that love isn’t about proving anything to the world or buying into a commercialised idea of romance—flowers that wilt, sweets that spike blood sugar, and gifts that impress briefly but add little real value. In today’s society, marketing often pushes the idea that love is proven by how much money you spend, and that buying things is treated as a sign of commitment.

Real love doesn’t need reminders or price tags. It lives in showing up every day, choosing each other on unromantic days, and nurturing the relationship intentionally and without an audience.

This isn’t a judgment on those who enjoy celebrating Valentine’s Day. It’s simply a personal choice.

Melloney Dassanayake (Miss Universe Sri Lanka 2024)

I truly believe it’s beautiful to have a day specially dedicated to love. But, for me, Valentine’s Day goes far beyond romantic love alone. It celebrates every form of love we hold close to our hearts: the love for family, friends, and that one special person who makes life brighter. While 14th February gives us a moment to pause and celebrate, I always remind myself that love should never be limited to just one day. Every single day should feel like Valentine’s Day – constant reminder to the people we love that they are never alone, that they are valued, and that they matter.

I’m incredibly blessed because, for me, every day feels like Valentine’s Day. My special person makes sure of that through the smallest gestures, the quiet moments, and the simple reminders that love lives in the details. He shows me that it’s the little things that count, and that love doesn’t need grand stages to feel extraordinary. This Valentine’s Day, perfection would be something intimate and meaningful: a cozy picnic in our home garden, surrounded by nature, laughter, and warmth, followed by an abstract drawing session where we let our creativity flow freely. To me, that’s what love is – simple, soulful, expressive, and deeply personal. When love is real, every ordinary moment becomes magical.

Noshin De Silva (Actress)

Valentine’s Day is one of my favourite holidays! I love the décor, the hearts everywhere, the pinks and reds, heart-shaped chocolates, and roses all around. But honestly, I believe every day can be Valentine’s Day.

It doesn’t have to be just about romantic love. It’s a chance to celebrate love in all its forms with friends, family, or even by taking a little time for yourself.

Whether you’re spending the day with someone special or enjoying your own company, it’s a reminder to appreciate meaningful connections, show kindness, and lead with love every day.

And yes, I’m fully on theme this year with heart nail art and heart mehendi design!

Wishing everyone a very happy Valentine’s Day, but, remember, love yourself first, and don’t forget to treat yourself.

Sending my love to all of you.

Features

Banana and Aloe Vera

Published

20 hours ago

2026/02/12

Sahan Weerasooriya

To create a powerful, natural, and hydrating beauty mask that soothes inflammation, fights acne, and boosts skin radiance, mix a mashed banana with fresh aloe vera gel.

This nutrient-rich blend acts as an antioxidant-packed anti-ageing treatment that also doubles as a nourishing, shiny hair mask.

* Face Masks for Glowing Skin:

Mix 01 ripe banana with 01 tablespoon of fresh aloe vera gel and apply this mixture to the face. Massage for a few minutes, leave for 15-20 minutes, and then rinse off for a glowing complexion.

* Acne and Soothing Mask:

Mix 01 tablespoon of fresh aloe vera gel with 1/2 a mashed banana and 01 teaspoon of honey. Apply this mixture to clean skin to calm inflammation, reduce redness, and hydrate dry, sensitive skin. Leave for 15-20 minutes, and rinse with warm water.

* Hair Treatment for Shine:

Mix 01 fresh ripe banana with 03 tablespoons of fresh aloe vera gel and 01 teaspoon of honey. Apply from scalp to ends, massage for 10-15 minutes and then let it dry for maximum absorption. Rinse thoroughly with cool water for soft, shiny, and frizz-free hair.