The euro rather than the dollar as a reference currency?

(Boursier.com) – Euro instead of the dollar? Ukraine is starting to consider moving away from the greenback, possibly linking its currency more closely to the European currency, the governor of his central bank told Reuters.

Potential membership of the European Union, “strengthening the role of the EU in the guarantee of our defense capacities, greater volatility in global markets and the probability of fragmentation of global trade” oblige the Central Bank to wonder if the Euro should be the reference currency for the Ukrainian Hryvnia instead of the dollar, told the Andriy Pyshnyi press agency. “This work is complex and requires high quality and versatile preparation”, according to him.

Domination you dollar

The dollar dominates international trade and represents the majority of world reserves. The main economies, including Saudi Arabia and Hong Kong, attach their currency to the dollar. But President Donald Trump sparked a trade war by introducing what could be the highest customs tariffs in a century, a decision that prompted certain observers to question the future role of the dollar as a global reserve currency. Ukraine, which is now in its fourth year of fighting Russian invasion, also saw Trump temporarily cut part of its military aid, even if an agreement was found concerning ores.

US dollars transactions continue to dominate all the segments of the exchange market, said Pyshnyi, but the share of transactions labeled in euros has increased in most segments, although “so far moderately,” said the Governor of the Central Bank.

Membership

The EU has opened the membership negotiations with Ukraine and Moldova almost a year ago, even if a long and difficult path remains to be traveled before these countries can reach the block. The president of the European Commission, Ursula von der Leyen, said in February that Ukraine could join the EU by 2030 provided that it continues to reform its political and judicial system at the current rate.