Cetoex News – France is looking to attend the upcoming BRICS summit in South Africa, Johannesburg in August. French President Emmanuel Macron expressed his interest to attend the summit hinting that the country wants to end reliance on the U.S. dollar. Macron repeatedly made controversial remarks early this year targeting the U.S. dollar’s supremacy on the global stage. The President called for Europe to rethink its dependence on the USD calling the currency a “great risk”.

Macron stressed that European countries must not “get caught up in crises that are not ours”. The President refers to the dollar’s debt as a major crisis that could hamper all countries that keep the greenback as reserves.

However, the BRICS alliance is yet to approve Macron’s interest to attend the upcoming summit. Russia is against France being a part of BRICS citing that the Macron administration wants internal details of the alliance and sabotage the soon-to-be-released currency.

In addition, the BRICS influence is growing in Latin America as Argentina sidelined the U.S. dollar for imports. Argentina carried out 19% of its overall imports by paying the Chinese Yuan and not the U.S. dollar. A total of $2.72 billion was settled in cross-border transactions with the Chinese Yuan giving the USD a miss.

In another significant shift, Pakistan settled trade for Russian oil imports by paying with the Chinese Yuan. The U.S. dollar took a back seat in all of these international transactions signaling that BRICS is stronger than expected.

BRICS Takes on the U.S. Dollar With the Chinese Yuan

The Chinese Yuan is the most commonly used currency for international trade than the dollar. A handful of countries have expressed interest to join the BRICS alliance and accept the new currency. The expansion from BRICS to BRICS+ could be decided in the next summit making the bloc financially stronger.

The overall BRICS+ GDP would reach $32.66 trillion if the expansion goes through. The estimate is $7.16 trillion ahead of the United States GDP which is at $25.5 trillion. Therefore, the dollar and the American economy stand at a risk of collapse if the BRICS currency gains strength in the international markets.

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Cetoex news – Kenya’s President William Ruto urged African countries to stop trading with the U.S. dollar for cross-border transactions. Ruto questioned the use of the dollar for global trade and asked African nations to pay with local currencies instead. The President stressed that Kenya has no reason to pay with the U.S. dollar for trade between African nations. The speech with lawmakers was met with applause at a time when 30 nations are looking to join the BRICS alliance.

The Kenyan President said that Africa must promote local currencies for payments among themselves during trade and not the USD. The aim is to strengthen local currencies and help African economies and businesses to sustain themselves in the long run.

BRICS: Stop Trading With The U.S. Dollar For Global Transactions, Says Kenyan President

Ruto confirmed that the African Export-Import Bank (Afrexim) is building a platform that will allow traders to settle payments with local currencies. The payment integration will be made with native currencies during cross-border trade among African nations.

The President said that he is not against the U.S. dollar but will trade in the USD while doing business with America. “We are not against the U.S. dollar, we just want to trade much more freely. Let us pay with the dollar what we are buying from the U.S. Let us pay with our currency what we are buying from Djibouti.”

He added, “Why is it necessary for us to buy things from Djibouti and pay in dollars? There’s no reason. If we are selling from Kenya to Djibouti, we have to look for U.S. dollars. How is the dollar part of the trade between Djibouti and Kenya?”

Countries around the world are expressing their interest to join the BRICS alliance. Kenya is among the nations that plan to enter the BRICS bloc and accept the new currency for international trade. If the new BRICS currency is accepted by the majority of the countries, the U.S. dollar could be badly hit.

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Cetoex News – Iraq’s Interior Ministry placed a ban on U.S. dollar transactions across the country in a move to strengthen the Iraqi Dinar. The country wants to control the fluctuating black market exchange rate that plagued forex prices for Chinese Yuan and USD. The move will also help boost its native currency as the U.S. dollar will take a step back nationwide. The decision to ban the dollar comes at a time when Iraq expressed its interest to join the BRICS alliance. Iraq would accept the soon-to-be-released BRICS currency to settle international trade and sideline the USD.

In another recent update, Egypt will settle trade with China, Russia, and India, using the native currencies of the respective nations. Egypt will pay the Russian Ruble to settle trade with Russia and pay with the Chinese Yuan for business with China. Similarly, it will pay with the Indian Rupee while paying for goods and services conducted with India. The U.S. dollar could no longer play a role in cross-border transactions among these nations.

In addition, France became the first European nation to ditch the U.S. dollar for an LNG gas trade with China. France settled the payment by paying with the Chinese Yuan and not the dollar. The move marked a shift in global transactions and Western economies are now paying with the local currencies of BRICS nations.

Just a few days ago, Pakistan also settled trade for Russian oil imports by paying with the Chinese Yuan. The U.S. dollar took a back seat in all of these international transactions signaling that BRICS is stronger than expected.

BRICS: U.S. Dollar Vs The Chinese Yuan

China and Russia are convincing several nations to settle trade with the Chinese Yuan and not the U.S. dollar. Russia recently reached out to Saudi Arabia and urged the oil-rich nation to accept the BRICS currency after its launch. Saudi Arabia is the top oil exporter to the U.S. and Europe and if they force the West to settle payment with BRICS currency, the U.S. dollar, Euro, and Pound could be hit.

The next BRICS summit will be held in August in South Africa. The bloc of five nations will jointly decide on the formation of a new currency at the summit. The fate of the dollar will be put to the test when the currency is launched in the international markets.

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Cetoex News – BRICS is looking to create a new currency to take on the U.S. dollar on the international stage for cross-border transactions. China’s President Xi Jinping is moving to convince several countries to settle trade with the Chinese Yuan. France recently settled an LNG gas trade with the Chinese Yuan and not the U.S. dollar. In addition, Yuan is now the top traded currency in Russia and not the USD. The development is adding strain on the dollar’s prospects and challenging its supremacy as the world’s reserve currency.

However, despite the aggressive efforts, China does not want the Chinese Yuan to replace the U.S. dollar, reported Business Insider. While the Yuan is the top contender to take on the dollar, China does not want it to be the global reserve, according to BI.

BRICS: The Chinese Yuan Being the World Reserve Currency Could Be Fatal, Fears China

For the Chinese Yuan to reign supreme, China’s economy needs to be liberalized for other countries to enter their markets. China is not in a position to liberalize its economy and allow the free flow of currency in and out of the country. The risks are high considering that it’s a Communist nation and not a democracy. “China doesn’t want to liberalize its currency and allow money to move freely in and out of its economy,” reported the outlet.

In addition, China cannot handle the pressures of making the Yuan the global reserve currency. Being the world’s reserve currency comes at the cost of running a persistent deficit like the U.S. does. The Communist country cannot afford the pressures of running a deficit as it risks tanking its entire economy.

“China is politically unwilling and economically unable barring significant structural reform to run a sustained current account deficit and to provide sufficient supplies of RMB assets globally,” said London-based economist Rory Green. Therefore, China is less likely to promote its native currency as a reserve in the next BRICS summit.

The BRICS alliance will launch a new currency that could take on the U.S. dollar on the global stage. Whether the new BRICS currency can withstand the pressures of the international markets, only time will tell. The next BRICS summit will be held in Cape Town, South Africa, in August 2023. BRICS is an acronym for Brazil, Russia, India, China, and South Africa.

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Cetoex News – (Kindly schedule for Sunday 7:30 pm IST) BRICS is not the only group of countries that are looking to end reliance on the U.S. dollar in 2023. A new bloc of ASEAN countries has come forward and agreed to ditch the dollar for global trade. The ASEAN alliance is looking to promote their native currencies for cross-border transactions by sidelining the USD. The leaders of 10 Southeast nations recently signed a declaration to stop using the U.S. dollar for international trade and aim to promote their local currencies instead

ASEAN is a bloc of 10 countries that compromise Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. Therefore, after BRICS, it is the ASEAN bloc of countries that is looking to follow suit.

The 10 nations have jointly accepted to reduce U.S. dollar payments and increase global settlement in native currencies. Moreover, international trade will be settled within the existing bloc of 10 countries and not with other nations out of the ASEAN alliance.

The move will bolster the power of ASEAN nations’ local currencies and lead the U.S. dollar into a gradual decline. This is one of the few steps taken by developing Eastern nations to take on the dollar. Also, if the momentum continues, many other developing could join together to end the U.S. dollar dominance.

5 BRICS & 10 ASEAN Countries Take on the U.S. Dollar

The official declaration of the ASEAN countries states that the bloc will advance local currencies and not the U.S. dollar. The declaration is signed and accepted by the respective nations’ leaders and remains in full force. Additionally, ASEAN nations said that their goal is to strengthen bilateral and multilateral payment activities among each other.

“We adopted the ASEAN Leaders Declaration on advancing regional payment connectivity and promoting local currency transaction to foster bilateral and multilateral payment connectivity arrangements to strengthen economic integration by enabling fast, seamless, and more affordable cross-border payments across the region,” the declaration read.

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Cetoex News – A growing number of countries are showing interest to join the BRICS alliance and accept the new currency. BRICS could soon become BRICS+ as the South African ambassador, Anil Sooklal hinted that the alliance could expand this year. The decision to allow other countries to join the bloc could be taken at the next summit in August in South Africa. Sooklal confirmed that more than a dozen countries have formally and informally applied to join BRICS, according to Bloomberg.

The alliance would become stronger after expansion as their GDPs would race ahead of the U.S. and other Western powers. This could put the dollar and the Euro on the back foot as developing nations might end reliance on the USD. Therefore, BRICS stands in a better position to usher in a new global financial order than at any time before.

30 Countries Are Now Interested In BRICS Currency

According to the latest report, 25 countries are ready to join BRICS and accept the new currency for international trade. The countries that have shown interest to join the BRICS alliance are Afghanistan, Algeria, Argentina, Bahrain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Saudi Arabia, Senegal, Sudan, Syria, the United Arab Emirates, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and Zimbabwe.

BRICS comprises five countries Brazil, Russia, India, China, and South Africa. Therefore, a total of 30 countries are now participating to dethrone the U.S. dollar from its global reserve status.

If these many countries ditch the dollar and begin cross-border transactions with a new currency, the USD could be hit. The dollar could weaken on a global scale and find no means to fund its deficit. The soon-to-be-released BRICS currency could have the power to eliminate the dollar’s dominance internationally.

The countries that are interested to join BRICS are also oil-rich nations. Therefore, the alliance could force European countries to pay with the new currency for oil and not the dollar. Read here to know how many sectors in the U.S. could be affected if this development takes place.

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Cetoex News – Amid its growing relevance, and the development of a BRICS currency, how likely is it that we will see the US dollar replaced globally? The economic bloc seems focused on the eventual replacement of the greenback for international settlements, but this would require a very specific action to take place.

Currently, the US dollar controls about 90% of all currency trading. Additionally, the American currency makes up just below 60% of foreign currency reserves that are held by central banks. So, could the BRICS currency really replace it? 

BRICS De-Dollarization Faces Uphill Battle

There is little argument to be made about the BRICS nation’s clear de-dollarization efforts. Moreover, as the development of a BRICS currency has been underway, replacing the US dollar globally remains the plan. Conversely, how likely that plan is to succeed alters by the day. 

Brazil, Russia, China, India, and South Africa would first have to fully embrace the Chinese yuan. This factor has been adopted more so over the last few months, but it remains difficult to sell. Specifically, the BRICS nations can clearly see that replacing the US dollar with another national currency would eventually devolve into circumstances similar to the current ones.

Alternatively, the development of an alternative international trading currency is the only true answer. Subsequently, this would allow the nations to grow the use of their national currency, while maintaining a vested interest in growing the alternative. However, the idea, when thought through, does present some downsides for the five nations. 

One key hurdle the nations would need to overcome is the wealth disparity among the various nations. Specifically, China maintains the second-highest economic power in the bloc. Moreover, the average citizen earns five times that of an Indian citizen. Creating a situation with greater economic differences that could make a currency agreement rather difficult. 

Additionally, volatility in exchange rates would be a point to address. How the BRICS currency is exchanged would require focus and adjustment. Additionally, the currency’s exchange rate would require constant fluctuations. To do this, the BRICS nation would first have to implement a central bank.

The development of a new central bank would be the only path forward without giving one nation immense power. The BRICS Bank, also known as the New Development Bank, does exist, but it does not operate as a central bank. 

Ultimately, a BRICS currency would be useful, but only for trade purposes. Moreover, it would only be useful for trade with other BRICS nations. Subsequently, sorting the logistics of its uses outside of that becomes difficult. Thus, supplanting the US dollar remains a rather difficult proposition. 

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Cetoex News – In a new interview with Fox Business, Senator Rand Paul says that, amidst the BRICS nations’ fight, the US dollar is in a precarious position. Specifically, Paul noted that recent foreign policies have worked to bring together the nation’s adversaries.

The de-dollarization efforts of the BRICS alliance have been a theme for the past few months. Moreover, global economic power has shifted, with the Chinese yuan gaining relevance in international settlements. Alternatively, the greenback is facing a growing demand to see its reserve currency status stripped.

BRICS Currency a Result of Foreign Policy?

The BRICS nations and their growth have been a vital development this year. Moreover, the collective has called for the end of the dominance of American currency. Subsequently, they aim to develop their own alternative currency for intentional trade purposes. 

However, one American politician believes that the year’s development is a self-fulfilling prophecy. Specifically, Senator Rand Paul says that the BRICS nations’ actions against the US dollar have put them in a precarious position. While being driven by the country’s own foreign policy. Conversely, sanctions placed against Russia by the West set in motion much of the de-dollarization efforts that have taken place this year. 

Paul stated, “When you look at the determination of the world’s trade, quite a bit of it, more than we’ve had for quite some time, is denominated in things other than the US Dollar.” Additionally, he noted that “foreign policy has something to do with that, too.”

“We pushed all of our adversaries farther and farther away from us and closer and closer together. It’s not just China and Russia being pushed together by foreign policy. Obviously, some of it is their own doing, and it’s a response to things they’ve done that we don’t like.” 

Moreover, Paul divulged his belief that the fiscal policies of the US have also driven current de-dollarization. Specifically, he stated, “If you treat your dollar like scrap paper and you continue to buy up enormous amounts of US debt, your dollar becomes worthless, too.” 

Conclusively, Paul noted a combination of the two that created the current predicament. Ultimately, he remarks that “it is not an unfounded prediction to say,” that the US could lose its reserve currency status.

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Cetoex News – The world has continued to observe the development of one of the fastest-growing economic blocs in the world. Moreover, a report from Business Africa observed the BRICS currency and its continued positioning as an alternative to the US dollar. 

The dollar has been firmly entrenched as the world’s reserve currency since 1944. However, the global market is gaining support for the developing BRICS currency, which is expected to be agreed upon by the collective at some point this year. 

BRICS Currency Gaining Traction

The BRICS alliance has firmly entrenched itself as a global power in the last several months. Moreover, following their surpassing of the G7 nations in GDP (PPP), they have demonstrated a transition in the global power scale. Now, their development of a global reserve currency alternative is gaining traction. 

Business Africa recently reported on the BRICS currency, which positions itself as a potential alternative to the US dollar. Additionally, the nation that is seeking membership in the collective is reportedly set to embrace a change in the status quo. Doing away with the weaponizing tendencies of the US dollar’s prominence. 

The report stated that the BRICS currency development is an attempt to “push back on American dominance.” Moreover, it discussed de-dollarization as a precursor to the eventual dethronement of the dollar internationally. 

The report also states, “This would in turn negate the impacts of economic and political changes in the West, in addition to improving economic stability, and reducing the risk of a financial crisis.”

The United States previously noted its “affirmative” American policy with Africa amidst its talk of joining BRICS. Alternatively, it has firmly denounced its desire to impede the free will of the nation to join the collective. Conversely, Business Africa notes that the BRICS currency could have positive economic impacts on the world’s finances. 

Subsequently, economist Aly-Khan Satchu noted the benefits of a BRICS currency. He stated that its development would help the BRICS countries affected by Western sanctions. Conversely, he assured that it will help economies be able to utilize their own resources. As opposed to relying solely on the American dollar within international settlements. 

“I think the BRICS currency is going to be a currency for trading purposes,” Satchu stated. “Behind that, you still have your own local currency. But when you come to do a trade exchange, you’re going to use this currency.” 

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Cetoex News – BRICS currency has been a topic of hot debate over the past few months, with many arguing whether its de-dollarization mission will succeed or fail. The BRICS alliance plans on establishing a new currency for its nations to use, which will replace and hopefully overshadow the US Dollar.

However, Bank of America remains adamant that this will be a tough task–de-dollarization– for BRICS. Bank of America Securities says that the global dominance of the US dollar is not in any way under threat, due to there being “no other currency alternatives” available.

The “USD” is “not about to lose its exorbitant privilege” as “no single alternative has appeared,” BofA said in the note authored by Athanasios Vamvakidis, a foreign exchange strategist, and other analysts.

The BRICS Alliance has a summit scheduled for this August, where new members and the new currency will be a trending topic. Multiple nations are already united in the idea of ditching USD. With talks rising though, and multiple other nations opting for new currencies over the US dollar, such as Argentina for the Chinese Yuan, BRICS is truly becoming a threat to the US currency. The August summit will be a massive checkpoint in this debate moving forward.

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