As per Brazil's president, the BRICS economic alliance is now formally planning to shift away from using the US dollar for trade settlements. This decision corresponds with the ongoing de-dollarization initiatives undertaken by the bloc, which aims to bolster the global utilization of local currencies.
During this week's BRICS Summit, President Luiz Inacio Lula Da Silva of Brazil officially affirmed this transition. Furthermore, the alliance revealed its intention to grow, with plans to include six more nations by 2024. This expansion is expected to reshape the geopolitical landscape significantly.
BRICS Decides to Shift Away From US Dollar in Trade Relations
The highly anticipated BRICS summit unfolded this week, captivating global attention, especially within the realm of geopolitics. All eyes were on the potential outcomes of the gathering, with a spotlight on developments in local currency initiatives and the alliance's expansion plans.
In a significant move, the BRICS group has now officially opted to forsake the US dollar for trade settlements, in line with its pre-established economic strategies. Brazil's president confirmed this pivotal decision. Its ramifications are expected to resonate in the performance of the US dollar over the coming months.
The proposition was initially introduced by Brazil's Lula da Silva during the current BRICS summit. Additionally, he actively advocated for the ongoing advancement of a unified BRICS currency. His rationale behind this move was to enhance the bloc's "payment options and reduce our vulnerability," which he communicated to fellow summit participants.
The call to shift away from the US dollar in global trade has been a persistent theme. However, as nations like Saudi Arabia, the United Arab Emirates (UAE), and Iran join the movement, the implications become even more significant. Notably, as substantial oil transactions move away from the US dollar, the ensuing geopolitical consequences are expected to be markedly noticeable.
Ramos, J. (2023) BRICS to Officially Abandon US Dollar, Watcher Guru. Available at: https://watcher.guru/news/brics-to-officially-abandon-us-dollar#google_vignette
(Accessed: 25 August 2023).