An alt-currency statement from the European Central Bank

Lagarde, in her speech at the US think tank Council on Foreign Relations (CFR), said that global value chains have deepened with the impact of international institutions and trade that developed in the post-Cold War era, Global supply has become more resistant to changes in domestic demand, and this has led to a long period of relatively low and stable recalls leading to the period of inflation.

“HE DEVELOPED THAT IT IS DEPENDING ON GLOBAL CONDITIONS”

Pointing out that central banks implement demand-directing inflation policies without paying much attention to supply-side cuts, Lagarde said: “However, this period of relative stability may now be giving way to permanent instability resulting in lower growth, higher costs and uncertain trade partnerships. Instead of more flexible global supply, we may risk repeated supply shocks. Recent events have revealed the extent to which critical supply is dependent on stable global conditions.” he performed the assessment of it.

Lagarde asserted that this is also seen in the European energy crisis, and that the US is completely dependent on imports of at least 14 critical minerals and that Europe is dependent on China for 98 percent of its supply of rare earth elements.

“WE TAKE STEPS”

Mentioning that supply cuts in these areas may affect critical sectors such as the automotive industry and the production of electric vehicles, Lagarde recalled that governments have taken measures in response to this.

Expressing that these steps taken in the realm of “strategic autonomy” may accelerate the fragmentation of the global economy, Lagarde said that this may also have possible effects for central banks.

WARNING “Fragmentation” in the GLOBAL ECONOMY

Noting that geopolitical risks lead to high inflation, low economic activity and a decline in international trade, Lagarde said: “If global value chains fragment along geopolitical lines, the increase in the global level of Consumer prices can vary between about 5 percent in the short run and about 1 percent in the long run. he said.

Lagarde noted that a multipolar world could be seen and that new trade patterns could have implications for payments and international foreign exchange reserves.

Speaking about China’s developing position in the global economy in recent years, Lagarde referred to the impact of new trade alliances on reserve assets.

This could create an opportunity for certain countries that want to reduce their reliance on Western payment systems and monetary frameworks, Lagarde said.

Noting the intention of some countries to use alternative currencies in trade and create an alternative to SWIFT, Lagarde said: “These developments do not indicate a recent loss of dominance for the US dollar or the euro. So far, the data does not show significant changes in the use of international currencies, but it does suggest that the state of international currencies should no longer be taken lightly. he used his statements. (AA)