The BRICS bank, commonly called the New Development Bank (NDB) officially announced a 3-year plan to completely end reliance on the US dollar. The 3-year de-dollarization initiative will lead to BRICS settling trade in local currencies and not the US dollar. The NDB is finding alternative ways to replace the US dollar from dominating the global financial sector. NDB will provide details to BRICS leaders highlighting the means to diminish transactions made in the US dollar.
BRICS Announce a 3-Year Plan To Ditch the US Dollar
The NDB has already outlined its first idea of lending loans to other developing countries in local currencies. The bank suggested to stop lending loans in the US dollar and limit the number of settlements in the USD. The move adds pressure on the dollar making it demand to decrease by a smaller margin.
However, the 3-year de-dollarization initiative could add further blows to the prospects of the US dollar. The NDB would provide guidelines to boost the usage of local currencies and strengthen the native economy of BRICS nations. Businesses in developing countries could thrive if local currencies are put forward as they don’t lose out on forex charges.
Therefore, the global financial sector could change rapidly by 2026 leading the way to a new world order. The financial power could tilt from the West to the East and developing countries could take the driver’s seat. BRICS already controls 30% of the global economy and the numbers could shoot up if they completely end reliance on the US dollar.
Read here to know how many sectors in the US will be affected if BRICS stops using the dollar for trade. The American economy could be the first to crash as the US will have no means to fund its deficit. The prices of all commodities would skyrocket leading to an imbalance in the economy in the coming years.
In conclusion, if BRICS play their cards well by 2026, the US dollar will lose its power in the international markets. Local currencies will dominate the financial sector and one among them could potentially become the next global reserve currency.