Seeds of Wisdom RV and Economic Updates Sunday Afternoon 7-27-25
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BRICS Trade Settlements Shift Away from USD: 50% Now in Chinese Yuan
A growing share of BRICS trade is being settled in local currencies, with the Chinese yuan emerging as the leading alternative to the US dollar. According to a recent report from the Official Monetary and Financial Institutions Forum (OMFIF), over 50% of intra-BRICS transactions are now conducted in yuan—a clear signal that the bloc’s de-dollarization efforts are accelerating.
Yuan Gains Ground Within BRICS Bloc
China is actively promoting the use of its currency within the BRICS alliance to settle trade deals, bypassing reliance on the US dollar. OMFIF data shows:
50% of intra-BRICS transactions are now settled in the Chinese yuan;
80% of Russia’s trade is conducted in national currencies such as the yuan and ruble;
India and Russia previously executed crude oil trades in rupees and rubles, bypassing the USD.
India alone reportedly saved more than $7 billion in foreign exchange fees through these non-dollar oil trades with Russia before President Trump returned to office in January.
Local Currency Use Rises, But USD Still Dominates Globally
While these intra-BRICS developments are notable, they must be understood in a broader global context:
The yuan accounts for just 2% of global cross-border payment activity;
The US dollar remains dominant, used in 88% of all international foreign exchange transactions.
Despite China’s push to internationalize the yuan, its global influence remains limited compared to the dollar. The shift within BRICS, while significant regionally, has not yet translated into a broader global trend.
Political Considerations and Strategic Positioning
The move toward local currency settlements is also being driven by political considerations:
China, Russia, and Iran are increasingly turning to non-dollar transactions to shield their economies from US sanctions;
The use of the yuan allows these nations to reduce their exposure to US financial pressure and trade restrictions.
However, this approach is not uniformly embraced across the bloc. India, for example, has distanced itself from the de-dollarization agenda in recent months. Amid concerns over potential US tariffs under the Trump administration, India has issued multiple public statements reaffirming its commitment to using the US dollar in trade.
A Fragmented Future for Global Settlements?
The shift in BRICS trade settlements suggests a growing regional preference for currency diversification. But despite the yuan’s growing role within the bloc, the global monetary system remains firmly anchored to the dollar.
The BRICS de-dollarization agenda may be gaining momentum in isolated corridors, but broader adoption still faces structural, geopolitical, and liquidity-based hurdles. For now, the greenback remains unchallenged on the world stage.
@ Newshounds News™
Source: Watcher.Guru
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