### Summary
Many developing countries are frustrated with the dominance of the US dollar in the global financial system and are seeking alternatives, but no concrete proposals have emerged. The dollar's influence can destabilize economies and impose financial sanctions on adversaries. However, the alternatives to the dollar have not gained enough traction, and the dollar remains the most-used currency in global business.
### Facts
- The strength of the US dollar against the Nigerian currency has made imported goods, like garments, unaffordable for local consumers.
- The BRICS bloc, consisting of Brazil, Russia, India, China, and South Africa, along with other emerging market countries, are meeting to express their grievances about the dominance of the dollar in the global financial system.
- The BRICS countries have discussed expanding trade in their own currencies to reduce reliance on the dollar.
- The US dollar is the most-used currency in global business and has shrugged off past challenges to its preeminence.
- The alternatives to the dollar, such as the euro and China's yuan, have not gained enough international gravitas.
- The dollar's influence can impose financial sanctions and destabilize economies.
- Many developing countries, like Kenya and Zimbabwe, have expressed their frustrations with the dollar and are seeking alternatives.
- Despite the frustrations, the dollar still has its supporters and is seen as a stabilizing force in some economies.
### Summary
Many developing countries, including BRICS nations, are frustrated with the dominance of the U.S. dollar and will discuss alternatives at a summit in Johannesburg. However, the dollar's position as the dominant global currency remains unchallenged.
### Facts
- The strength of the U.S. dollar against local currencies in developing countries has caused prices of foreign goods to soar, leading to reduced sales and job layoffs.
- The BRICS bloc, consisting of Brazil, Russia, India, China, and South Africa, along with other emerging market countries, will discuss their grievances against the U.S. dollar's dominance at a summit in Johannesburg.
- The BRICS countries have previously talked about introducing their own currency, but no concrete proposals have emerged. However, they have discussed expanding trade in their own currencies to reduce reliance on the U.S. dollar.
- The U.S. dollar is the most widely used currency in global business and previous challenges to its dominance have failed.
- The BRICS countries launched the New Development Bank in 2015 as an alternative to the U.S. and European-dominated International Monetary Fund and World Bank.
- Developing countries are concerned about the U.S.'s use of the dollar's global influence to impose financial sanctions and the destabilizing effects of fluctuations in the dollar on their economies.
- While the euro and China's yuan have gained some traction in recent years, they still do not rival the dollar in terms of international gravitas.
- The alternatives to the dollar have not been able to gain dominance, and any shift away from the dollar will take time and trust.
- Some countries, such as Argentina and Zimbabwe, have experienced economic turmoil and have turned to the U.S. dollar for stability.
### Summary
Global dedollarization efforts are facing a credibility challenge as currencies such as the Russian ruble, Chinese yuan, and Argentine peso suffer significant declines, highlighting the perceived stability and reliability of the US dollar.
### Facts
- 📉 The Chinese yuan, Russian ruble, and Argentine peso have all experienced significant declines in value recently, causing their respective central banks to take measures to stabilize their currencies.
- 🌍 These declines come at a time when countries like Russia and China are actively trying to reduce their reliance on the US dollar in trade and investments, a trend known as dedollarization.
- 💰 However, the recent exchange-rate turmoil and instability of these currencies against the US dollar could undermine the dedollarization efforts and raise questions about the feasibility of finding a common currency to combat the dominance of the dollar.
- 💱 Dedollarization efforts in Argentina have been limited, with some even advocating for adopting the US dollar as the local currency to combat hyperinflation.
- 🌎 While the share of the US dollar in global reserves has decreased over the years, it still makes up nearly 60% of the world's foreign-exchange holdings, highlighting its long-standing dominance as the world's reserve currency.
Note: The text provided is truncated, so the summary and bullet points may not capture the complete context of the original text.
### Summary
The strength of the U.S. dollar against other currencies, such as the Nigerian naira and Zimbabwean dollar, has made it difficult for local consumers to buy foreign goods, leading to economic troubles in these countries.
### Facts
- 💰 The strength of the U.S. dollar has pushed the price of foreign goods beyond the reach of local consumers in Nigeria.
- 💸 Many developing countries are unhappy with the dominance of the U.S. dollar in the global financial system.
- 🌍 The BRICS bloc, which includes Brazil, Russia, India, China, and South Africa, will discuss their grievances against the dollar at a meeting in Johannesburg, South Africa.
- 💵 The alternatives to the U.S. dollar, such as the euro and China's yuan, have not been able to rival its dominance.
- 🇦🇷 In Argentina, a presidential candidate is calling for the U.S. dollar to replace the country's troubled peso.
- 💼 In Zimbabwe, the U.S. dollar is widely used in transactions due to the instability of the Zimbabwean dollar.
- 💸 Vendors in Zimbabwe are even mending damaged U.S. dollar bills for a small fee due to a shortage.
### Credit
By: Dionne Searcey and Constant Méheut
Source: The Washington Post
India's central bank is urging local banks to encourage trade settlements between the United Arab Emirates and India using the dirham or Indian rupee instead of the U.S. dollar, as part of an initiative to promote the use of local currencies and reduce the trade deficit with the UAE.
While strategic competitors in emerging markets are calling for change and the share of the US dollar held as official foreign exchange reserves has declined, it is unlikely that there will be a major shift in the US dollar's role as the central global currency due to the stability and reputation of the US government, as well as the challenges and limitations of other options like the renminbi.
USD/JPY and DXY have a similar currency value, but there are variations in the exchange rates with other currencies such as EUR/USD and GBP/USD. USD/JPY is currently overbought compared to DXY, EUR/USD, GBP/USD, and oversold compared to JPY/USD. There is a significant 2000 pip relationship between USD/JPY and EUR/USD, GBP/USD, and DXY, with specific price levels to watch. However, trading in currencies and financial instruments involves risks, so investors must manage their own risks, including stop loss and margin requirements.
The inclusion of oil-producing countries like Saudi Arabia and the UAE into the BRICS alliance could lead to 90% of the world's oil trade being settled in local currencies instead of the USD, potentially triggering a shift away from the U.S. dollar and impacting the global finance system.
Indian exporters are hedging more of their future foreign currency receipts as the rupee's decline to near record low levels allows them to lock in better exchange rates, with data showing that $3.6 billion was hedged in two sessions, a 60% increase compared to August levels.
A group of developing countries known as BRICS, including Brazil, Russia, India, China, and South Africa, is determined to challenge the dominance of the US dollar in global finance and trade through the process of de-dollarization, which they believe is irreversible and gaining pace. The shift away from dollar dominance is driven by recent geopolitical tensions and the desire to have more choices in global financial interactions, rather than being anti-West or anti-dollar. However, experts believe that the dollar will remain the dominant global currency for the foreseeable future.
India and the UAE have agreed to settle bilateral trade in their own currencies, a move that is expected to strengthen economic relations and boost exports for India. The agreement aims to lower transaction costs and reduce uncertainty caused by fluctuating exchange rates, benefiting both countries and de-risking their dependence on reserve currencies.
Despite recent efforts to de-dollarize global trade, Indian Oil and Gas Minister Hardeep Singh Puri believes the dominance of the US dollar is unlikely to be threatened by emerging market currencies such as the Indian rupee and China's yuan. Puri stated that while he wishes the rupee to be the lead currency globally, he is also a realist and recognizes the difficulty of replacing the dollar.
India has recently entered into a historic oil deal with the UAE, marking a significant move away from the US dollar; however, Indian Oil and Gas Minister Hardeep Singh Puri believes that de-dollarization is not yet taking hold and that the US dollar's dominance remains unchallenged.
The dollar's status as a global reserve currency is facing challenges as countries like China and India promote trade in their own currencies, digital currencies gain popularity, and geopolitical conflicts threaten the international monetary system dominated by the dollar.
Developing countries, including members of the BRICS and ASEAN alliances, are actively seeking to reduce their dependency on the US dollar and promote their local currencies for global trade, with a total of 21 countries officially agreeing to ditch the US dollar in 2023.
The US, Saudi Arabia, India, and other nations are discussing a potential infrastructure deal to enhance trade between the Gulf and South Asia through railways and ports, in an effort to counter China's Belt and Road initiative.
Asian currencies, including the Japanese yen and the Singapore dollar, are trading against the US dollar with varied movements, while the year-to-date percentage changes for the currencies show fluctuations.
India, along with several countries including the UAE, Saudi Arabia, EU, France, Italy, Germany, and the US, will launch an economic corridor connecting India, the Middle East, and Europe, which is expected to significantly boost trade and connectivity.
The United States and Saudi Arabia are in discussions to secure African metals valued at $15 billion in order to support their energy transitions, with a state-backed Saudi venture expected to buy mining assets in countries such as the Democratic Republic of Congo, Guinea, and Namibia, allowing U.S. companies the right to purchase part of the production.
The United States is in regular contact with Saudi Arabia to ensure a stable and affordable supply of energy to global markets, according to National Security Advisor Jake Sullivan. This comes as cuts in oil output by Saudi Arabia and Russia are expected to result in a significant market deficit.
The BRICS bloc, including countries like India, China, and Russia, is slowly reducing its dependency on the US dollar and using their local currencies for trade, which could potentially weaken the US dollar's position as the dominant global currency.
