Currency Politics in Global Financial System: Perspective from Bangladesh

Currency Politics in Global Financial System:
Perspective from Bangladesh


How does currency affect the global political landscape? What does it mean for Bangladesh?” 

Professor Shahab Enam Khan [1]:  

“Now, currency politics is a major issue in international affairs, particularly since it is dominated by three power centers. 

One is obviously the US, which is the dollar; the other is the European Union, which is the euro; and the third is the pound, which is the UK. Right. 

So most of the trading in the world happens through these three currencies. In this currency, the major dominant currency is obviously the dollar, and what happens? 

Every dollar that is used in the global system goes through the New York stock exchange, meaning that dollar remains a critical part of US foreign policy.  And this is the reason why they would always essentially be looking to strengthen the value of the dollar. 

Now, this is why the Ukraine invasion has become a fundamentally polarizing factor, because this is the time when both China and Russia, two of the largest economies in the world, have now agreed that they will be trading more in the ruble, the UN, or local currencies than the US dollar. 

And that also comes as a parallel to the US banking system, which involves something called SWIFT. 

So nobody wants to be under sanction, and nobody wants to be under whimsical sanction because somebody is using SWIFT, and I’m doing my essential trade, and I’m going to get a sanction. 

So again, you’re now seeing that parallel economic initiatives and parallel economic institutions are coming. 

So this is why, even if you look at the Iranian case, Iran used to do their oil trade in dollars, and Iran started to shift their dollar accounts to their euro accounts. And that’s exactly when the conflict started with the US Treasury. 

So this is why the new politics of currency will essentially be there. Moscow has clearly told not-friendly states, as they mentioned, the countries that are not friendly to pay their oil and gas prices in rubles. 

So again, if you have more ruble infused in your economy, your economy will always be resilient because you’re not vulnerable to external shocks caused by the US dollar stock exchange. 

So now you’re seeing that this politics is coming. Again, Bangladesh has now offered to consider whether we will have a barter system with Russia in terms of our payments. Even Bangladesh had a 50 million-dollar government export, which we have canceled now. 

So because of the banking system, we haven’t been able to really join, create, or perhaps be a part of new financial arrangements, as we have seen. So, which means the challenge for Bangladesh is quite a lot.”

Questioner: “Thank You.”  


[1] Professor, Shahab Enam Khan

Department of International Relations

Jahangirnagar University, Savar, Dhaka