BRICS countries’ move to eliminate the U.S. dollar from international trade would be irreversible once a new currency is formed, according to Russia’s Minister of Foreign Affairs, Sergey Lavrov. The de-dollarization process is currently being undertaken by BRICS nations comprising Brazil, Russia, India, China, and South Africa. Lavrov stressed that nations need to terminate dependence on the West for military and trade. A defunct USD could no longer create conflicts across borders, he mentioned at a press conference in Moscow.
Also Read: BRICS Advancing To Eliminate U.S. Dollar Financial System
The dollar is currently the default reserve currency and a medium of exchange for global trade. Russia and China and other BRICS countries are looking to eliminate the USD to settle payments in their native currencies. The next BRICS summit will be held in August in South Africa and a decision for a new currency will be jointly made.
Lavrov hit back at the U.S. for pressing sanctions against Russia and said that the path to de-dollarization will “accelerate”. The Foreign Affairs Minister said to the Biden administration that “the path of sanctions is the path to nowhere”. Russia evaded U.S. sanctions and it is now trading with China by paying Chinese Yuan.
Saudi Arabia is buying record levels of Russian oil and it is laundering it into the European markets. The developments show the Russian economy is stable despite the sanctions and now the dollar is weakening.
“We are starting to see a flight from the dollar. So far, it is not all that swift, but it is sure to accelerate. In fact, this trend is irreversible,” warned Lavrov. He added, “Serious countries and sober-minded politicians are drawing relevant conclusions and these conclusions are definitely in favor of terminating dependence on the West”.
Also Read: Will the U.S. dollar Collapse Now That BRICS Are Developing Their Own Currency?
BRICS & The U.S. Dollar War
While the US dollar commands the world of trade, the new BRICS currency is yet to make its mark. The new form of payment could hurt the dollar as BRICS GDP overtook the G7 nations in terms of purchasing power parity (PPP). In addition, China’s GDP beat all estimations and grew 4.5% in Q1 of 2023 alone. You can read how the Chinese economy weathered the storm of the Covid-19 restrictions and came out successfully here.
Also Read: BRICS & Other Countries Showing Less Interest In Holding the U.S. Dollar
In conclusion, BRICS can pose serious challenges to the dollar and knock it out from the world stage. The Biden administration needs to set its record straight and come out with new strategies and plans to stop USD from a global fall.