The US dollar’s brand value has been tarnished by the BRICS alliance, admits Marc Chandler, Strategist and Managing Director at Bannockburn Capital Markets in New York. The bloc banded together, calling out the White House for weaponizing the greenback through sanctions and SWIFT exclusion. The recent trade wars and tariffs have made it worse for the US and easier for BRICS to point fingers at America’s wrongdoings.
Also Read: BRICS Pays 43% of Peanuts Exports in the Chinese Yuan
US Dollar’s Global Image Gets Tarnished by BRICS
Developing countries are looking up to BRICS for a solution to come out of the grip of the US dollar. The alliance is delivering its wishes through new trade deals, policies, and settlements in local currencies. “I’m not sure the dollar has lost its global standing. To me, the dollar’s brand has been tarnished,” said Chandler. In addition, the widespread discontentment towards America stems from unruly foreign polices from the White House.
Chandler explained that developing countries, including BRICS, do not like to be forced to trade in the US dollar. “There are many companies and countries that don’t have a choice but to trade and borrow in US dollars,” he said.
Also Read: Trump’s Warning: BRICS Attacks Dollar, Threatens Countries That Join
The forceful imposition has made BRICS break away from the clutches of the US dollar. This is the prime reason why the bloc is aiming to trade in local currencies and not the greenback. “But they do have the discretion to reduce their dollar exposures by trading more in their own currencies and in gold. And that’s what’s happening now,” he said.
BRICS retreating from the US dollar indicates that the development could only escalate hereon. Many countries that are on the sidelines would follow the bloc’s principles of de-dollarization. Moreover, the next decade could usher the world into a new financial era where the greenback could lose its sheen and not be supported by developing countries. That would be the end of the American hegemony as we know it.