The U.S. dollar has been the top global reserve currency for decades, however, the BRICS alliance is looking to challenge that. South Africa’s President Cyril Ramaphosa and Brazil’s President Lula da Silva are continuing de-dollarization efforts among BRICS. Lula da Silva urged developing countries to review their reliance on the U.S. dollar at a finance summit in Paris today.
Brazil’s President wants to use local currencies for cross-border transactions to challenge the U.S. dollar. Da Silva also suggests other alternatives such as the soon-to-be-released BRICS currency for global trade.
“Why Brazil and Argentina would trade in dollars,” said the Brazilian president. “Why don’t we do it in our own currencies… can’t Brazil and China trade in their currencies? The question of why I need to buy dollars is on my agenda.”
Da Silva also spoke highly about creating a common BRICS currency back in April that can challenge the US Dollar. “I am in favor of creating, within the BRICS, a trading currency between our countries, just like the Europeans created the euro.” He also strives for the BRICS Banks and NDB to strengthen, and be used as an alternative financial institution.
US Treasury Secretary Janet Yellen was also in attendance at this meeting and spoke out against the de-dollarization efforts. “There is a very good reason why the dollar is used widely in trade. And that’s because we have deep, liquid, open capital markets, rule of law, and long and deep financial instruments,” she said in Paris.
The economic bloc’s leaders’ summit will take place in Johannesburg, South Africa, from Aug. 22-24.