Ukraine war may ‘change trajectory’ of China’s moves to insulate against US dollar, Fed chair says
- US Federal Reserve Chair Jerome Powell was questioned on Thursday in a US Senate Banking Committee hearing
- The hearing focused on how China might view US-led efforts to isolate Russia’s economy, especially by damaging its ability to use the US dollar
US Federal Reserve chair Jerome Powell said the Ukraine war could have the effect of accelerating China’s moves to develop alternatives to the current US dollar-dominated international payments infrastructure.
Senator Jack Reed, a senior Democrat who has focused on China’s rise as a global power, told Powell at the hearing that Beijing will start thinking about “how they can avoid that fate if they get into a similar circumstance” as Russia.
China “will look very closely” at the “whole issue of the dollar as the medium of exchange to the world,” said Reed, who chairs the Armed Services Committee.
Reed asked Powell if he was watching the issue and whether he would report back to the US Congress on developments and share views on what he thinks might happen. “Yes to all of the above,” Powell said.
