JOHANNESBURG - Paulo Guedes, Minister of Finance of Brazil, predicts that the world will have ony 5 currencies within the next 2 decades.
This was stated during a heated debate among panel members on “the dominance of the dollar” yesterday at the WEF in Davos, Switzerland.
“We still have a long way to go, and it will depend to what currencies investors run to when things go wrong. Dollar dominance will not change overnight, it took the dollar more than 2 decades to overtake sterling”, Guedes said.
Gita Gopinath, Chief Economist of the International Monetary Fund said the dollar is seen as an anchor currency for most countries.
“The dollar provides incredible safety during times of crises, if things go bad, investors turn to the dollar. It is all about trust, and trust is not easy to build”, she said. Mário Centeno, Finance Minister of Portugal, said that the Euro "is still a toddler, a young currency, compared to the dollar. But the Euro is now more robust and is a strong player in the global financial system. The consolidation of the various currencies allowed regional dominance supporting a strong currency. Who would have thought 30 years ago that Europe will have one currency”, he asked.
Mário Centeno, Finance Minister of the XXI Constitutional Government of the Portuguese Republic, said “The Euro is still a toddler, a young currency, compared to the dollar. But the Euro is now more robust and is a strong player in the global financial system. The consolidation of the various currencies allowed regional dominance supporting a strong currency. Who would have thought 30 years ago that Europe will have one currency”, Centeno asked.
Geudes ended the session saying “Africa is the country to watch. Africa became the continent of hope, 20 years ago it was the continent of despair”.