The BRICS economic alliance is moving forward with major de-dollarization measures, which will result in over $70 billion worth of trade being conducted in currencies other than the US dollar. This grand shift is prompted by a milestone trade agreement planned to decrease the alliance’s dependency on the US dollar for trade.
As part of this landmark agreement, the BRICS alliance intends to abandon the dollar completely as the trading currency. Instead, transactions will be settled in local currencies, a move aimed at reshaping the global finance landscape. This transformation will impact all nine alliance members, along with half a dozen other participating nations.
In recent years, there has been a significant transformation in global finance, challenging Western dominance in the sector, due in part to the efforts of the BRICS alliance. Their de-dollarization initiative has been on the rise since the expansion of the bloc in 2023.
The forthcoming trade agreement, which flags a considerable increase in the magnitude of de-dollarization efforts, indicates that $70 billion worth of trade associated with the BRICS alliance will no longer be transacted in US dollars. Figures show that last year, trade involving Kazakhstan and the BRICS countries hit this mark. These settlements, going forward, will all be in local currencies.
Kazakhstan was one of the nations that signed the trade agreement with the BRICS alliance. Consequently, their trade with the bloc, which saw a growth of 55% in 2023, is now set to bypass the US dollar. Moreover, it is envisaged that the country’s trade activities with the alliance will continue to surge in 2024.
The influence of the move to discard the Western currency for trade is bound to be profound, considering the variety of nations that engage in trade with the alliance. The imminent summit is set to witness more countries join the group, just one of many changing dynamics set to reshape the global order. As many as 30 nations have shown interest in joining the alliance, with several expected to be welcomed into the fold this year.
