G20 is not the forum to discuss ‘de-dollarisation’: CEA V Anantha Nageswaran

The important thing for us to remember is that G20 is relevant simply because it exists in times of global economic uncertainties.

The push by various nations to trade in local currency and move away from the dollar is not a result of the war in Europe, and hence will not be discussed in the upcoming meeting of G20 Finance Ministers and Central Bank Governors, India’s Chief Economic Advisor V Anantha Nageswaran said. Talking to DH’s Arup Roychoudhury, he explained that the planned framework to globally regulate cryptocurrency is an ongoing process and progress has been made on the issue of debt sustainability of poor nations. Edited excerpts:

In times of global economic uncertainties like these, what role does G20 have?

The important thing for us to remember is that G20 is relevant simply because it exists in times like these. It allows us to discuss issues outside of the domestic political compulsions of the member nations. Issues like cryptocurrency and how to reform institutions which were formed in the aftermath of the second world war, like the International Monetary Fund and the World Bank.

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Institutions such as these have to finance those traditional requirements but also have to deal with additional issues such as how to prevent pandemics, and how to deal with climate change.

The economic impact of the war in Europe will continue being discussed in G20. However, one impact that hasn’t been touched upon is ‘de-dollarisation’, or how countries are looking to expand trade in their local currencies.

I don’t think this is a topic of discussion for G20. These are things that countries pursue based on their individual needs for dollar and the ability to mobilise the dollar, and whether it makes sense for them to trade in some other currency.

Where are we on the issue of regulating cryptocurrency?

A common global framework to regulate digital assets is a work in progress. Opinions, strategies, tactics, all are evolving in the light of the fact that some banks in the United States were exposed to crypto assets and they had a fallout because of that. So I don’t think that countries have arrived at a clear position yet. It is a work in progress at this stage.

One of the issues that Finance Minister Sitharaman has been optimistic about is how China is more willing to discuss the issue of debt of low and middle-income nations. What can we expect in the coming meetings?

We have to acknowledge that there has been some incremental progress. There has been resolution in cases like Zambia and others. In the case of Sri Lanka, everybody has given their financing assurances including China. These are all incremental progress. Given the state of the world, we have to keep pushing for such progress.