The upcoming annual summit for the BRICS bloc is set to bring forth in-depth conversations about currency. Indeed, the bloc will continue its emphasis on de-dollarization, as it pushes forward the promotion of local currency use. Moreover, amid the BRICS nation’s developments, the world is preparing for the end of the US dollar.
In a recent opinion piece, the Lowy Institute discussed the prominence of de-dollarization. Moreover, they provided evidence that global finance is predicting an eventual decline in the US dollar. Maybe not in their statements, but certainly in their actions.
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BRICS Setting The World on De-Dollarized Trajectory
The BRICS bloc has seen immense growth this year. Specifically, it has given a renewed voice to the global south, and it has been outspoken in its desire to challenge Western hegemony. Indeed, the economic alliance has voiced its desire to bring about a multipolar world.
Moreover, amid the BRICS ascension, the world is seemingly preparing for the end of the US dollar. Specifically in its actions, as the de-dollarization efforts of the BRICS bloc have seemingly taken hold. Additionally, the Lowy Institute has discussed how these actions are showing global preparations.
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The Lowy Institute, an independent international policy think tank, stated that “a new global reserve currency” could threaten the dollar. Moreover, it proclaims that “the dollar’s dominance may be coming to an end.” Additionally, they detailed the events of the World Economic Forum in Davos. Specifically, Saudi Arabia’s statements that it will be open to trading in currencies outside of the US dollar
The think tank noted that Saudi Arabia hasn’t done this “in nearly 50 years,” noting that de-dollarization efforts are picking up globally. Moreover, they stated how the potential arrival of a BRICS gold-backed currency has many central banks stockpiling gold reserves. Subsequently, noting, “countries are positioning themselves for a new international system.”
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The institute added, “As the reliance on the US dollar diminishes, central banks will begin dumping their dollar reserves. This will result in hyperinflation, a spike in interest rates to compensate for the loss of purchasing power, and falling asset prices, further accelerating the US decline.”
Although many have professed that the decline in the US dollar will not arrive for some time, the world is preparing for it. Additionally, if the BRICS bloc does embrace expansion, it could only drive de-dollarization efforts further. Eventually created a greater effort to diminish the dollar’s international prominence.