China and BRICS Shake the US Dollar: What Next?
China and BRICS Shake the US Dollar: What Next?
Fastpo: 6-9-2024
The BRICS nations are intensifying their efforts to reduce reliance on the US dollar in global trade and finance.
This de-dollarization initiative has gained significant momentum with the recent inclusion of Saudi Arabia, Egypt, the UAE, Iran, and Ethiopia into BRICS as of January 2024.
A major step in this direction is the development of an alternative payment system to SWIFT, which is currently dominated by the US dollar.
This new system aims to facilitate international transactions independent of US financial control, reducing the geopolitical leverage of the US.
Additionally, the BRICS New Development Bank (NDB) is increasing its lending in local currencies of member countries, with a goal to have 30% of its loans in local tenders by 2024.
This reduces reliance on the dollar and mitigates risks associated with exchange rates and US monetary policies.
The expanded BRICS, now including major oil producers like Saudi Arabia, enhances its economic influence, supporting the de-dollarization agenda by integrating more economies capable of trading in local currencies.
There is also ongoing discussion about introducing a unified BRICS currency to further accelerate this shift, potentially altering the global economic power balance. These initiatives by BRICS signify a concerted effort to create a more multipolar global financial system, challenging the hegemony of the US dollar.
While the full impact of these measures will take time to manifest, the move towards de-dollarization marks a significant shift in global economic strategies.
But the de-dollarization do not limit to the initial BRICS move.