### 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
India is unlikely to endorse a common BRICS currency, as it fears China's dominance in the bloc and the strengthening of the yuan. However, it may not immediately block discussions on the proposed currency at the BRICS Summit.
### Facts
- 🚫 India is not interested in being part of the proposed BRICS currency, as it sees it as China's attempt to gain hegemony.
- 🔄 India may not use its veto power to stop the currency proposal immediately, but it has concerns about China's dominating role.
- 🤝 The proposed BRICS currency is expected to heavily benefit China, as it is the dominant economy in the bloc.
- 🌍 The plan for a common BRICS currency may take time due to the different levels of economic development among the members.
- 📅 The 15th BRICS Summit will be held in Johannesburg from August 22-24, with leaders from Brazil, Russia, India, China, and South Africa expected to attend.
- 💲 The US dollar accounts for 58.36% of global foreign exchange reserves, while the Chinese yuan only accounts for 2.7%.
- 💱 Determining the value of the proposed BRICS currency would be a challenge due to the differing economic situations of the member countries.
- 💼 Harmonizing financial rules and regulations, such as debt-to-GDP ratio, would also be difficult for the BRICS members.
- 💔 Weaker economies in the EU, like Greece and Portugal, faced difficulties when the euro was introduced, and BRICS countries lack sufficient social security to handle strict debt-to-GDP ratios.
### 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
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.
The Brics economic group, consisting of Brazil, Russia, India, China, and South Africa, is discussing the possibility of expanding its membership and promoting the use of local currencies for trade settlement, with aims to challenge the dominance of the US dollar, but analysts believe that the greenback is unlikely to lose its status as the international reserve currency.
Chinese President Xi Jinping and former Brazilian President Luiz Inácio Lula da Silva emphasized the need for the Global South to have more influence, as they attended a summit with other BRICS leaders to discuss boosting their presence on the world stage and possibly introducing a common unit of currency.
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.
Brazil's President, Luiz Inacio Lula Da Silva, announced at the BRICS Summit that the economic alliance will officially abandon the US dollar for trade settlements, aligning with de-dollarization efforts and expanding to include six additional countries by 2024.
The BRICS summit is aiming to reduce reliance on the U.S. Dollar, as the coalition confirms new members including UAE, Egypt, Ethiopia, Saudi Arabia, and Argentina, and discusses the possibility of a new payment system and currency backed by gold.
The BRICS, a bloc of emerging market nations, has expanded its membership to include Saudi Arabia, Iran, Egypt, Argentina, Ethiopia, and the United Arab Emirates (UAE), with the goal of building a fair, just, inclusive, and prosperous world; however, experts question whether BRICS can effectively compete with the West given their differing priorities, and the ambition of creating a common BRICS currency to rival the dollar is unlikely to materialize due to competing interests and priorities among member states.
The BRICS summit focused on increasing the use of local currencies for trade, but there were no discussions about a digital currency; however, three non-BRICS countries also announced plans to use local currencies instead of the dollar for cross-border trade.
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 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.
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 coalition, along with new members, aims to reduce the dominance of the US dollar by using their own currencies for oil trade, posing potential risks to the US's global leadership and economy.
The BRICS group is considering the idea of a common currency, but one expert believes it is unlikely to happen due to tensions between China and India.
BRICS (Brazil, Russia, India, China, South Africa) is aiming to challenge the global reserve status of the US dollar by exerting control over a significant portion of the oil sector, starting with Russia's Gazprom Neft announcing that it will no longer rely on the US dollar for trade and is open to accepting local currencies.
BRICS countries, including China, Brazil, and Saudi Arabia, sold a total of $17.4 billion in U.S. treasuries in September 2023 to prevent the dollar from rising against local currencies and weakening commodities, such as gold and oil.
