The West has imposed economic sanctions on Russia for a period of time. Let’s not talk about the impact of these sanctions on Russia. For EU countries, they are now facing a situation of internal and external troubles, domestic consumption costs are soaring, and global inflation is further intensified. The current price is painful. Meanwhile, the euro’s use as a global payment currency is falling sharply over this period, with the euro seeing its biggest percentage point drop in more than a decade in March, according to the latest data.
According to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the market share of payments in euros fell to 35.4%, the lowest percentage since the early months of the pandemic. Meanwhile, the U.S. dollar continued to hold the top spot for the 10th month as business transactions began to turn to the U.S. dollar as a safe haven due to international conflicts and global inflation. The U.S. dollar was the most used currency in global payments last month, accounting for 41.1% of all Swift transactions.
You must know that the payment share of the euro has always been on the rise last year, reaching 37.79% at one time, while the payment share of the US dollar was only 38.85% at that time. The euro had a trend of challenging the US dollar at that time. However, just last month, several Russian banks were sanctioned to ban the use of the Swift payment system, and Russia also fought back, and exports of natural gas are only allowed to be settled in rubles, which greatly reduces the attractiveness of the euro as a trade transaction currency.
Although the U.S. dollar has almost dominated global payments since 2013, it is also the settlement currency that most countries use to trade imports and exports. However, as emerging countries are more inclined to diversify their currencies, the dollar’s “one dominance” phenomenon has also reversed. During this Russia-Ukraine conflict, Russia, Iran, Saudi Arabia and other countries all announced that they would consider using renminbi to settle oil transactions with China. A previous survey by the European Central Bank also showed that China’s trade status in the world has led to changes in the pattern of global settlement currencies.
In some cases in other currencies, while the yen fell to a 20-year low against the dollar this month, usage of the yen increased in March, reaching 2.8% of payments, the highest level since October . The Australian dollar’s share fell slightly.