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phil
@phil
Welcome @henryfarrell! Henry is a professor of international affairs and author of several books, including the award winning Of Privacy and Power. He has agreed to do an AMA for the /books channel. Reply with your questions (please make sure to tag him so he can easily find them)
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miguelito
@mc
@henryfarrell how significant, if at all, were the US and European decisions to expropriate Afghan and Russian FX reserves, respectively, in pushing non-OECD countries to reduce their reliance on the dollar? Observers, myself included, have expected a shift away from the dollar as the world's reserve currency for some time, but in practice it seems dependence is increasing. What would cause this to change, and do you anticipate such a shift?
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Henry Farrell
@henryfarrell
So the Afghan story is more complex than recognized by people - what the US did more or less was to sequester the funds to protect them from private litigants (there is a whole other book to be written on how private litigation against states over terrorism has reshaped politics - I am not the person to write it though). And the Russian central bank reserves question is ongoing. It is clear that the EU, where most of the funds are held, is more nervous than the US about doing more than just denying Russia access to them, which is what it is doing at the moment. We have not seen huge shifts as you say, and most of what we have seen is movement from USD to other Western currencies. I think that there is an "only game in town" aspect to this - https://www.goodreads.com/quotes/8139947-the-finest-line-of-poetry-ever-uttered-in-the-history - also, so long as USDs are central to transactions, central banks are going to need 'em.
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