In a commentary yesterday on the just-concluded BRICS Summit, the Global Times noted aspects of the exodus from the dollar, interviewing a “Shanghai-based oil industry insider.” The daily writes: “So far, the volume of transactions within BRICS using U.S. dollars and euros has continued to decline, open data showed. The insider stressed that when oil and other commodities are traded directly in non-dollar currencies, the function of U.S. Treasury bonds as foreign exchange reserves will be irreversibly weakened, as oil, the most important energy commodity traded, has always been linked to the status of the global reserve currency. The selling of U.S. dollars and U.S. Treasuries will be accelerated.”
In fact, Global Times adds, a trend of reducing holdings of U.S. Treasuries has gradually emerged. “Saudi Arabia’s holdings of U.S. Treasuries fell to a six-year low to $108.1 billion in June. The cumulative net selling of U.S. debt is nearly $80 billion. U.A.E. also sold nearly $4 billion U.S. debt in total, according to data from the U.S. Department of Treasury.
