BRICS countries Russia, China, and India are looking to replace the US dollar with local currencies for global trade. China is advancing in convincing other developing countries to ditch the US dollar and settle cross-border transactions in local currencies. The Communist nation has convinced Saudi Arabia, Pakistan, Russia, India, and other African countries to pay the Chinese Yuan and not the US dollar for bilateral trade.
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On the other hand, Russia is bypassing US sanctions by selling crude oil at discounted rates to developing nations. BRICS member Russia is asking other countries to settle oil payments in the Chinese Yuan or the Ruble. Additionally, India is signing new trade agreements with the UAE and other countries to pay the Rupee for global trade and not the US dollar.
The developments indicate that the three BRICS countries want to put their local currencies first and not the US dollar. So will BRICS members Russia, China, and India successfully replace the US dollar with local currencies for global trade? In this article, we will highlight the prospects of the US dollar against BRICS members’ local currencies.
BRICS: China, Russia, and India To Dethrone the US Dollar?
The answer is straight to the point – BRICS members Russia, China, and India cannot replace the US dollar for trade. They could if they want to, but the infighting between the members and the quest for superiority among themselves is what’s stopping them. BRICS members are united on paper but launch tirades against each other domestically in political events.
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Firstly, India is upset that China is using BRICS as a stepping stone in its quest for global financial domination. India is also unhappy that the Chinese Yuan is now being used for global transitions as the move benefits China.
Both India and China have been at loggerheads for decades and the border disputes are only making their hatred for each other worse. For instance, very few times have Indian leaders spoken well about China domestically and used the tactics to garner votes.
Secondly, India is upset that Russia is helping Pakistan to be inducted into BRICS. This puts pressure on India-Russia relations as the Modi-led government does not want to share the stage with Pakistan. Cracks could soon emerge in BRICS and the infighting between Russia, China, and India could be laid out open.
Finally, and in conclusion, developing countries are spending too much time busy infighting and playing politics, and the real idea of dethroning the US dollar is lost in transit. If the Chinese Yuan looks to replace the US dollar, India will not like it, and if the Rupee looks to dethrone the US dollar, China will not like it.
Both countries will do everything possible to derail each other’s plans. Therefore, local currencies have no chance of uprooting the US dollar as the de facto global currency for trade.