China has sold $101.9 billion worth of US Treasury securities in the past year, reducing its holdings from $869.3 billion to $767.4 billion. This is a significant decline from the peak of $1.31 trillion in 2013.
China’s Shift Away from the Dollar
China’s move away from the dollar is part of a broader trend towards diversifying its foreign exchange reserves. The country is also exploring the creation of a digital currency that could challenge the US dollar’s dominance.
Fed Governor Downplays Dollar’s Decline
Federal Reserve Governor Christopher Waller has dismissed concerns about the imminent demise of the US dollar. He acknowledges that the dollar’s role as the world’s reserve currency is evolving, but argues that it remains the most widely used currency.
Sanctions and Digital Currencies
Waller believes that America’s use of sanctions against foreign nations could help maintain the dollar’s dominance. However, he also acknowledges that the growth of digital currencies could pose challenges.
Dollar’s Resilience
Despite these challenges, Waller believes that nations still have few practical alternatives to the dollar. He notes that in times of global uncertainty, investors tend to flock to the dollar rather than away from it.
