### 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
The BRICS countries, consisting of Brazil, Russia, India, China, and South Africa, are holding a summit in Johannesburg to challenge Western economic dominance. They aim to create a multipolar global order and are open to expansion.
### Facts
- The BRICS countries represent 23% of the world's GDP and 42% of the world's population.
- The group was formed in 2009 and meets annually to assert their position against the US and EU.
- The BRICS bloc is now open to expansion, with 23 applicants and numerous interested parties.
- The New Development Bank, an alternative to the World Bank and IMF, has invested $30 billion in infrastructure projects.
- Russia's President Putin, who is the target of an ICC arrest warrant, will attend the summit via video link.
- The BRICS countries aim to decrease their reliance on the US dollar and increase the use of their national currencies.
- They also plan to create their own international university rankings, challenging existing rankings that may exclude certain countries for political reasons.
BRICS seeks to expand its membership and become a champion of the "Global South," with over 40 countries expressing interest in joining the bloc to challenge Western dominance and address grievances related to abusive trade practices and neglect of poorer nations' development needs, among others. However, observers note that BRICS has a limited track record and may struggle to deliver on expectations.
The US Dollar strengthens as several BRIC countries express support for the currency, while Fed officials remain quiet on rate cuts, and geopolitical tensions boost the Greenback during US trading hours.
Russia has called on the BRICS alliance to abandon the US dollar for trade settlements and instead embrace local currencies, in a continuation of the bloc's de-dollarization efforts.
BRICS, comprised of Brazil, Russia, India, China, and South Africa, now represents almost a third of global GDP and is surpassing the economic influence of the G7, with over 40 nations expressing interest in joining.
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.
The BRICS alliance, consisting of Brazil, Russia, India, China, and South Africa, has decided to invite Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates to join their economic coalition, according to South African President Cyril Ramaphosa.
With major oil exporters joining BRICS, analysts suggest that the adoption of local currencies for trade among BRICS countries, rather than the US dollar, is becoming more natural, potentially reducing transaction costs and weakening the role of the petrodollar.
BRICS is considering making local currencies the only accepted form of payment for oil and gas settlements, which could potentially shift global power from the West to the East.
The BRICS 2023 Summit saw the expansion of the alliance with the addition of six countries, potentially leading to a shift in the global economic order and significant de-dollarization efforts, while notable absences by Vladimir Putin and Chinese President Xi Jinping raised concerns, and China and India made progress in their border talks.
The BRICS nations are divided on the issue of de-dollarization, as statements from the bloc's leaders indicated, despite discussions about the creation of a common currency to rival the US dollar.
The BRICS expansion and their de-dollarization efforts have been met with a relatively calm response from the US, Germany, and the European Union, emphasizing the importance of countries choosing partnerships based on their national interests.
The BRICS bloc, which has now expanded to include 11 countries, controls 30% of the global economy, 46% of the world's population, and a significant share of commodities such as manganese, graphite, nickel, and copper, as well as 42% of the global oil supply, potentially putting pressure on the US economy and challenging the traditional world order.
The extended BRICS alliance, which now includes six new countries, has a GDP in purchasing power parity (PPP) that accounts for more than one-third of the global economy, giving them the potential to control exports of oil to the West and influence trade settlement currency choices.
The residual impact of sanctions against Russia is causing divisions among the Group of 20 countries, with some nations resisting US-led efforts and forming alliances with Russia and China, while the BRICS nations are seeking to reduce reliance on the US dollar.
The BRICS alliance is considering the creation of a 'single unit account' as an alternative currency to the US dollar, in order to settle cross-border transactions without depending on a single currency or local currencies.
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.
Creating a BRICS currency backed by gold is considered nonsensical by a former Bank of America strategist, as it would essentially be another gold derivative and would weaken individual currencies within the group.
The BRICS expansion, which includes countries like Saudi Arabia, the UAE, and Iran, has raised concerns in the U.S. and EU as it poses a threat to Western-dominated financial markets, while China's influence grows and the alliance aims for de-dollarization in global trade.
The BRICS group invited six new members, including Saudi Arabia and the United Arab Emirates, indicating a move towards energy dominance and diversification, but internal divides and strategic rivalries within the bloc may hinder its ability to challenge the current global energy order.
Developing countries, including the BRICS alliance, are looking to end reliance on the US dollar due to increasing debt and the threat of inflation, which could lead to a decline in the dollar's value and a rise in prices. Economist Peter Schiff warns of a tragic ending for the US dollar if other countries continue to move away from it.
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.
The BRICS alliance has welcomed six new countries, including Saudi Arabia and Iran, leading to concerns from Western powers about the expansion's potential impact on the traditional financial order; however, the US and Germany have stated that countries have the right to choose their trade partners and forge deals according to their national interests.
The American banking, trade, forex, tourism, and other sectors could be severely impacted if BRICS countries stop using the U.S. dollar for trade, leading to potential financial catastrophe and hyperinflation.
The BRICS New Development Bank has announced a 3-year de-dollarization plan to increase local currency transactions and reduce reliance on the US dollar for developing country investments, aligning with the alliance's strategy to move away from the dollar. Additionally, the bank's expansion may greatly affect its lending model and facilitate the alignment with the alliance's strategy.
