BRICS And De-Dollarization Efforts – Analysis

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The BRICS alliance, consisting of Brazil, Russia, India, China, and South Africa, has called for Middle Eastern nations to stop using the US dollar for oil payments and instead use local currencies. This move is part of a broader effort to decrease reliance on the US financial system and promote the use of local currencies. The BRICS alliance is expanding its membership to include oil-producing nations and is expected to strengthen economic ties with China and India. However, transitioning away from the US dollar presents challenges, as it is widely accepted for oil payments and local currencies only constitute a small fraction of trade. Despite the obstacles, the BRICS alliance is persisting with its de-dollarization efforts, which could have significant implications for the global financial system and US influence. The dominance of the US dollar in the global economy has had both positive and negative effects on emerging markets. While the dollar's stability and acceptance as a reserve currency have allowed access to cheaper financing, it has also increased vulnerability to global economic shocks. The BRICS alliance's proposal to stop trading oil in US dollars could challenge the dollar's dominance as the world's reserve currency and impact US sanctions and global financial stability. Emerging markets heavily reliant on the dollar may face currency risk, economic instability, and vulnerability to external shocks.

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https://www.eurasiareview.com/22042024-brics-and-de-dollarization-efforts-analysis/