Seizure of Russia’s external assets is prompting countries to think about protecting economic security via alternative payment mechanisms for commodities. The dollar’s role as the leading reserve currency remains intact.
Foreign exchange reserve management could change following seizure of Russian assets. Politicisation of SWIFT could impact flows into banking systems due to fears of potential seizures without legal recourse.
High transaction costs for foreign trade never featured prominently during the globalisation era. New lockdowns in China and Russian sanctions accentuate supply shortages and inflation under current global monetary arrangements.