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IMF official: Russia sanctions may 'fragment' currency market, dilute dollar's influence
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An International Monetary Fund (IMF) official has warned that sanctions against Russia may dilute the U.S. dollar’s dominance.
Gita Gopinath, IMF’s First Deputy Managing Director, told the Financial Times Friday that the sanctions have pushed Russia to seek assistance from other currencies. The increased use of other currencies, such as China’s renminbi, could lead to a more fragmented international monetary system.
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"The dollar would remain the major global currency even in that landscape, but fragmentation at a smaller level is certainly quite possible," Gopinth said. She noted that some countries have opened negotiations over the currency in which they pay for trade.