The BRICS alliance has taken its de-dollarization agenda quite seriously since 2022 and has begun using local currencies for settlements. The bloc is focused on strengthening its local currencies and using them for payments. This strengthens their GDP and also eases import and export transaction fees for businesses.
BRICS Settle 65% of Trade in Local Currencies, US Dollar Makes Just 35%
Pradip Dhir, the Director of Pranan Consulting, shared a report highlighting that the BRICS alliance has used the US dollar for only 35% of cross-border trade. The remaining 65% of transactions were made in local currencies. That’s a significant share in domestic currencies, leaving the US dollar far behind in transactions.
Trade between BRICS member China and Russia was heavily settled in local currencies and not the US dollar. India, in part, also paid in rupees, rubles, and dirhams for payments among BRICS members. In addition, Iran has been using the Chinese yuan for settlements due to sanctions by the US. All of these combined put local currency usage at 65%, compared to 35% in the US dollar.
Also Read: India To Discuss CBDC Payments at BRICS Summit in September
Russia and China have been settling payments in the yuan and ruble simultaneously since 2022. Even Saudi Arabia, which had to join BRICS, has been accepting the yuan for oil deals. This strategic shift makes BRICS reduce its US dollar dependency and focus on using local currencies. China has also tailor-made several deals catering to local currency settlements since 2024.
The BRICS alliance has been making the US dollar a villain on the global financial stage. After US President Donald Trump’s reelection, the bloc walked back on the de-dollarization agenda. This came after Trump threatened to impose tariffs on member countries and was even ready to levy a 100% tariff. The threats worked, and member nations dropped the de-dollarization agenda, temporarily.