U.S. raises interest rates, straining dollar credibility

Cartoon by Ma Hongliang

The U.S. has long leveraged the hegemonic position of the U.S. dollar in the international monetary system to export its domestic financial crises while reaping world wealth, which has led to the waning credibility of the U.S. dollar.

The U.S. Federal Reserve has raised interest rates several times to ease domestic inflationary pressures, causing economic turmoil in many countries and regions. With the sharp appreciation of the U.S. dollar, non-U.S. dollar currencies have suffered heavy losses, and countries with substantial U.S. dollar-denominated debts have faced soaring pressure on debt repayment.

The U.S. has also repeatedly lifted the debt ceiling of the federal government. Currently, the U.S. federal government's debt ceiling is around $32 trillion, representing over 120 percent of the country's GDP.

The huge amount of U.S. national debt has directly increased the risk of a U.S. debt default, sparking global distrust. In addition, the U.S. often wields U.S. dollar hegemony to impose unilateral sanctions and long-arm jurisdiction against other countries, which seriously undermines the global economic order and trading system.

U.S. monetary policy has seriously overdrawn global trust in the U.S. dollar and led to an acceleration in de-dollarization. The U.S. should adopt responsible fiscal and monetary policies and work together with other economies to maintain international economic and financial stability and promote world economic recovery.

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