Yellen: Will be “a long time before USD replaced as key global currency

US Treasury Secretary Janet Yellen said on Wednesday that it will be “a long time, if ever” before the US dollar is replaced as the key currency for the global economy.

The impact of sanctions on Russia show the importance of the US dollar and euro, as well the US’ partnership with its allies.

The US dollar’s dominance as a means of exchange is due to the strength of the US economy, financial system and confidence in US financial markets, Yellen added.

Yellen sent a warning Wednesday to countries that are not moving to cut financial ties with Russia or that seek to undermine sanctions imposed due to the war in Ukraine.

“While many countries have taken a unified stand against Russia’s actions and many companies have quickly and voluntarily severed business relationships with Russia, some countries and companies have not,” Yellen said in prepared remarks to be delivered at a 10 a.m. ET event hosted by the Atlantic Council, a nonpartisan think tank on international affairs.

“Let me now say a few words to those countries who are currently sitting on the fence, perhaps seeing an opportunity to gain by preserving their relationship with Russia and backfilling the void left by others. Such motivations are short-sighted,” Yellen said.

While Secretary Yellen did not call out any specific countries, some nations — including China and India — have not been in a rush to back away from Russia, given their need to import vast amounts of energy.

“Let’s be clear,” Yellen said, “the unified coalition of sanctioning countries will not be indifferent to actions that undermine the sanctions we’ve put in place.”