Musk blames Fed’s policy for eroding US dollar’s value

MOSCOW: American billionaire investor Elon Musk (pix) has blamed the US Federal Reserve’s tight monetary policy for hurting the US dollar’s position as a global safe-haven currency.

“Serious issue. US policy has been too heavy-handed, making countries want to ditch the dollar,“ Musk wrote on social media.

The tech investor was responding to an analysis by Genevieve Roch-Decter, chief executive of the Canadian capital market advisory firm Grit Capital, who warned that the US dollar was slowly losing its reserve currency status,reported Sputnik.

The Fed hiked key interest rates to nearly 5 per cent in March in a bid to stem the soaring inflation that is reportedly running about three times higher than the pre-pandemic average.

Musk said that the adverse effect of the Fed’s interest rate policy was exacerbated by “excess government spending, which forces other countries to absorb a significant part of our [US] inflation.”

The online debate over the Fed’s decision to make the most aggressive interest rate moves in decades followed an announcement of a deal by China and Brazil that will allow them to trade in their national currencies and drop the dollar as an intermediary.

China also completed its first yuan-settled LNG trade with France on Tuesday, while its yuan-denominated trade with Russia has spiked massively since last year. Roch-Decter argued that markets were shifting to the yuan in a sign of China’s growing global influence. –Bernama