BRICS is convincing other developing countries to use local currencies and ditch the US dollar for global trade. The alliance is spearheading the de-dollarization initiative calling for other nations to cut ties with the USD. China, Russia, and India are the top three nations looking to push their local currencies ahead of the US dollar. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
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BRICS: India & Nigeria Agree To Use Local Currencies, Not US Dollar for Trade
On the heels of the de-dollarization agenda, BRICS member India and the African nation Nigeria have agreed to use local currencies for bilateral trade and not the U.S. dollar. The two countries officially signed a trade agreement where the majority of payments will be settled in local currencies ditching the U.S. dollar.
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Nigeria has also applied to join BRICS and expressed its interest in being a part of the grouping. India and Nigeria will use local currencies in the bilateral trade agreement for energy, pharmaceuticals, and transport sectors. The bilateral trade between India and Nigeria stood at $11.8 billion in FY 2022-23.
In FY 23-24, trade between the two countries reached $7.89 billion. BRICS members have been finding new countries since 2022 to push the de-dollarization agenda ahead and are succeeding in their motives. The main goal of the bloc is to uproot the US dollar as the world’s reserve currency and replace it with local currencies.
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“Both sides agreed to the early conclusion of the Local Currency Settlement System Agreement to further strengthen bilateral economic ties,” the ministry said. If BRICS begins to sign deals with new countries without using the dollar, the US economy will be at risk. The next few years will be challenging for the prospects of the US dollar.