Financial sanctions imposed on Russia threaten to gradually dilute the dominance of the U.S. dollar and could result in a more fragmented international monetary system, Gita Gopinath, IMF's First Deputy Managing Director, told The Financial Times, APA reports.
Russia has been hit with a plethora of sanctions from the United States and its allies for its late-February invasion of Ukraine. Russia has called the invasion a 'special operation' to disarm its neighbour.
"The dollar would remain the major global currency even in that landscape but fragmentation at a smaller level is certainly quite possible," Gopinath told the newspaper in an interview, adding that some countries are already renegotiating the currency in which they get paid for trade.
She said that the war will also spur the adoption of digital finance, from cryptocurrencies to stablecoins and central bank digital currencies.
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