Brazil’s Finance Minister Fernando Haddad criticized the White House for weaponizing the US dollar and said in a television interview with UOL that BRICS has a right to uphold trading in local currencies and not succumb to Trump’s pressures. Haddad remarked that the US has no right to prevent other countries from using their local currencies they deem fit. “That doesn’t make sense. If we can make our transactions cheaper, why would we make them more expensive?” he said.
The bilateral trade in local currencies between BRICS members makes it cheaper as the foreign exchange rates are lower. In addition, it also boosts their currency in the forex markets and helps to solidify their GDPs. Import and export businesses could save tons of money as exchange rates are mostly minimal compared to the US dollar. The minister acknowledged that the US dollar will remain the world’s reserve currency, unless the White House makes a series of mistakes.
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The US Can’t Stop BRICS From Using Local Currencies
The minister explained that Trump’s trade wars and tariffs are one of those mistakes, but will end after he leaves office. He also mentioned the US dollar’s growing deficit is a major challenge the White House must overcome to maintain its dominance. “Another thing is this issue of turning the dollar into a weapon of war, like what happened against Russia. So, this is what is weakening it,” he said. His statement comes after Trump imposed tariffs on BRICS countries for reducing reliance on the US dollar and using local currencies for trade.
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BRICS is looking at various options to push local currencies as the center of all payment settlements. They are ushering in a multipolar financial world where a basket of local currencies would dominate all trade and cross-border transactions. The US dollar will exist, but its de facto status as the reserve currency would be punctured.