Treasury Secretary Scott Bencet mentioned in a CNBC interview on Wednesday that negotiations between the U.S. and Iran include Iran joining the dollar system and pricing its oil sales in dollars—he sees this as part of reestablishing the dominance of the U.S. currency. Bencet also stated that the U.S. Treasury will oversee the handling of Iran's frozen funds in Doha, Qatar, with a "significant portion" being used to purchase American food and pharmaceuticals, effectively reinvesting the funds into U.S. products.
The Treasury Secretary plans to extend the dollar-denominated framework to Venezuela, indicating that Caracas will return to the dollar system and use the currency as the "core" of their trade, contrasting with the previous sanctions era when the country sold oil to China at a discount without receiving dollars. Bencet further predicts that Russia may return to the dollar system after the Russo-Ukrainian war ends. During a speech at the New York Economic Club on Tuesday evening, Bencet stated that the concept of a "strong dollar" is not solely based on exchange rate levels, mentioning that the dollar's decline since last year is merely "the price on the screen." He attributes the global appeal of the dollar to the depth, breadth, and liquidity of U.S. capital markets, asserting that "everyone wants to be here," and claims that the dollar can remain strong even in the face of rate cuts, as long as the economy accelerates.
The Treasury Secretary plans to extend the dollar-denominated framework to Venezuela, indicating that Caracas will return to the dollar system and use the currency as the "core" of their trade, contrasting with the previous sanctions era when the country sold oil to China at a discount without receiving dollars. Bencet further predicts that Russia may return to the dollar system after the Russo-Ukrainian war ends. During a speech at the New York Economic Club on Tuesday evening, Bencet stated that the concept of a "strong dollar" is not solely based on exchange rate levels, mentioning that the dollar's decline since last year is merely "the price on the screen." He attributes the global appeal of the dollar to the depth, breadth, and liquidity of U.S. capital markets, asserting that "everyone wants to be here," and claims that the dollar can remain strong even in the face of rate cuts, as long as the economy accelerates.
