Amid the greater de-dollarization efforts of the BRICS economic alliance, India has taken a major step to ditch the US dollar in the oil trade. Indeed, Bloomberg reports that the Reserve Bank of India (RBI) has asked state-owned refiners to accept 10% of oil payments in rupees.
The move appears to be part of a concerted effort for the country to continue shifting the global oil economic landscape. India had previously rejected Russian oil company demands that payments be made in the Chinese Yuan. Although that signified turmoil within the BRICS collective, it still serves the goal of diminishing US dollar usage within the bloc.
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India Seeks to Lessen US Dollar Usage in Oil Trade
For much of the last year, the BRICS economic alliance has sought continued ways to de-dollarize the global economy. That initiative has partnered with the continued expansion of the bloc to work against Western influence. Thus far, the local currency promotion plans have taken hold.
Those efforts have taken another step forward for the BRICS alliance, however, as India has taken a clear step to ditch the US dollar in its oil trade. Indeed, Bloomberg reports that state-owned refiners have been asked to accept at least 10% of their oil payments in rupees.
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The request was made as the RBI has noted concern that energy demand will work against the nation’s currency. Therefore, it is seeking increased usage of that currency as opposed to something like the dollar. Yet, they have also previously declined to use China’s yuan in similar oil trade.
With the introduction of the United Arab Emirates (UAE) and Saudi Arabia into the bloc, oil has become a clear resource of interest. The overall power that BRICS could have over the sector is unquestioned. Moreover, they can continue to dictate inter-bloc trading that is settled outside of the US dollar. Subsequently, increasing promotion of the collective’s local currencies.
These efforts were also aided by the announcement of a BRICS blockchain-based payment system. The system was announced on Thursday and presents some concern for the US dollar. Additionally, it connects to the overall desire for more digital assets in the modern economy. Indeed, BRICS is set to implement them in a way the West does not seem interested in.