The U.S. dollar’s dominance may be coming to an end, and the phenomenon could be fueled by the BRICS alliance. The Lowy Institute, an independent international financial think tank, published a report titled De-dollarization: Shifting Power Between the U.S. and BRICS, indicating that the U.S. dollar’s reign might be ending.
Also Read: BRICS: 85% of The World’s Population Ready Ditch U.S. Dollar
According to the report, a new global currency might challenge the U.S. dollar and throttle it from the world’s reserve status. Furthermore, if a handful of countries follow the BRICS path of de-dollarization, the greenback could be hit on the global stage.
“The dollar dominance may be coming to an end,” wrote Michael Roach, a management consultant and researcher for the institute. “Will a new global reserve currency threaten the greenback’s supremacy? The short answer is yes,” he predicted in the report.
Read here to know how many sectors in the U.S. could be impacted if BRICS starts trading in local currencies. The report comes before the BRICS summit, where the member nations are looking at alternatives other than the U.S. dollar.
Also Read: Will U.S. Economy Be Impacted if BRICS Trade In Local Currencies?
BRICS Vs the U.S. Dollar
Russian President Vladimir Putin recently announced that the BRICS bloc intends to begin work to create an “international reserve currency.” In addition, there have been speculations that the BRICS could launch a currency backed by gold to take on the U.S. dollar.
Also Read: BRICS: Over 40 Countries Ready To Join the Alliance
The U.S. dollar could brace for impact if BRICS convinces the majority of countries to end reliance on the greenback. Read here to know what ace investor Warren Buffet thinks could happen to the U.S. dollar in the coming years.
BRICS is an acronym for Brazil, Russia, India, China, and South Africa. The upcoming summit will be held on August 22–24 in Johannesburg, South Africa. Also, heads of state from over 69 countries have been invited to attend the summit. Moreover, the alliance will discuss trading in native currencies to strengthen their respective local economies.