Russia is in talks with the new BRICS member Ethiopia to trade in local currencies and not the US dollar. The process is in its early stages and both the countries are looking to cooperate in the upcoming bilateral trade deal. However, Russia and Ethiopia confirmed that they are “committed” to using local currencies after the deal goes through.
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The two nations are planning to settle cross-border transactions in the Russian ruble and Ethiopian birr. The development will help boost both the nations’ economies and lift their GDPs. The commitment stands in line with the de-dollarization agenda which was kick-started in 2022. 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: Russia & Ethiopia Ready To Sideline the US Dollar
Ethiopian Ambassador to Russia, Genet Teshome Jirru confirmed that the de-dollarization deal is being chalked out within the two countries. He explained that the transition is still in its infancy stage but the commitment to sideline the US dollar remains intact. BRICS is looking at every option to end dependency on the US dollar and use local currencies for settlements.
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“This process between Russia and Ethiopia is still in its early stages. So it is too early to provide precise statistics. But both sides are clearly interested in trading in national currencies and this cooperation will develop over time,” said the Ethiopian Ambassador. If the deal goes through, BRICS will add another feather in its cap in ending reliance on the US dollar.
Just recently, BRICS members India and Indonesia signed a trade agreement to use local currencies and not the US dollar. The deal went through despite Trump threatening tariffs on countries that plan to ditch the USD. Read here to learn how India and Indonesia successfully created a trade deal to use local currencies for cross-border transactions.