FT has learned about the US administration's discussion of strengthening the dollar's position

The administration of US President Donald Trump is discussing measures to strengthen the global position of the US currency in the face of growing competition with China. Officials from the White House and the U.S. Treasury Department held a series of meetings with experts on dollarization. This was reported on November 2 by the Financial Times (FT) newspaper.

"Employees of government departments, including Treasury and the White House, met with Steve Hanke, a professor at Johns Hopkins University and a leading expert on dollarization, over the summer to discuss how the administration can advance this policy," the publication says.

The newspaper spoke with Professor Hanke himself, who said that there was a group in the Trump administration that was interested in strengthening the dollar. Meetings with the expert took place in August with the participation of representatives of the Council of Economic Advisers, the National Economic Council and the National Security Council. The possibilities of expanding the use of the dollar in developing countries, including Argentina, Lebanon and Pakistan, were discussed, according to FT.

The initiative is aimed at countering China's efforts to promote alternative settlement mechanisms in international trade. White House Deputy Press Secretary Kush Desai, in a conversation with FT, confirmed the consultations, but noted that the administration has not yet made final decisions on dollarization policy.

Professor Hanke singled out Argentina as one of the main candidates for the transition to the dollar, but the current crisis in the country and the lack of dollar reserves complicate this possibility.

"All these rescue measures are just a terrible deal, if only a quarter of the debt remains and is invested in production activities, then it will not be enough to provide sufficient free cash flow to service the debt... The profit margin should be on the moon," Hanke concluded.

Can the yuan displace the dollar from international payments? Analysis

In late February, Trump threatened the BRICS with tariffs of 150% for trying to create an alternative to the dollar. At the same time, he believes that the BRICS countries want to replace the US currency with the Chinese yuan.

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