The BRICS alliance is looking to challenge the US Dollar as the major trading currency.
The U.S. dollar has been the top global
reserve currency for decades,
But the BRICS alliance comprising; Brazil,
Russia, India, China and South Africa is determined challenge that. South
Africa’s President Cyril Ramaphosa and Brazil’s President Lula da Silva are
continuing de-dollarization efforts among BRICS. Lula da Silva urged developing
countries to review their reliance on the U.S. dollar at a finance summit in
Paris today.
Brazil’s President wants to use local
currencies for cross-border transactions to challenge the U.S. dollar. Da Silva
also suggests other alternatives such as the soon-to-be-released BRICS currency
for global trade.
“Why Brazil and Argentina would trade in
dollars,” said the Brazilian president. “Why don’t we do it in our own
currencies… can’t Brazil and China trade in their currencies? The question of
why I need to buy dollars is on my agenda.”
Da Silva also spoke highly about creating a
common BRICS currency back in April that can challenge the US Dollar. “I am in
favor of creating, within the BRICS, a trading currency between our countries,
just like the Europeans created the euro.” He also strives for the BRICS Banks
and NDB to strengthen, and be used as an alternative financial institution.
US Treasury Secretary Janet Yellen was also
in attendance at this meeting and spoke out against the de-dollarization
efforts. “There is a very good reason why the dollar is used widely in trade.
And that’s because we have deep, liquid, open capital markets, rule of law, and
long and deep financial instruments,” she said in Paris.
The economic bloc’s leaders’ summit will take
place in Johannesburg, South Africa, from Aug. 22-24.
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