Will the Russian gold peg decision negatively impact the US dollar?

Prima facie, it does raise questions over the dollar dominance, but that is not going to be very easy to break. Needless to say, the real intent of the Russian action is to reduce the value of the US dollar as a global standard for payments and for reserve holdings. Russia wants to ensure that the dollar does not enjoy its exorbitant privilege for too long.

For now, the US dollar remains the most acceptable global currency. If Russia succeeds in its endeavour, it will be able to demonstrate to the world that gold can do all that and more. Remember that gold is a physical asset and not a fiat currency. So, the supply of gold can never be boosted at the whims and fancies of any central bank in the world like the Fed.

The billion dollar question is whether it would really impact the dollar clout? In a way, Russia had belled the cat and a lot will depend on factors like how EU reacts and how the Middle East plays and whether China plays ball with Russia. Remember, China has long been talking about an alternative to the US dollar and they will look for opportunities.

The big oil exporters to China like Saudi Arabia are ready to accept Yuan for oil exports to China. India is willing to do Rouble-Rupee trade with Russia, notwithstanding pressures from the Western powers. US had been silently debasing the dollar with deficits. Someone had to count the corpses once the tide subsided and Russia is doing exactly that.