America’s role in global trade is getting challenged as China is eating a larger share of the international pie. Its Q1 GDP rose 4.5% in 2023 despite clamping lockdowns for a year and outperformed all estimates in the markets. The dominance of the dollar is being questioned by BRICS and other countries.
The nations want their native fiat or a new currency to take the global stage. Central Banks around the world are looking to launch CBDC and undercut the dollar’s dominance in the coming years.
The supply and demand for the U.S. dollar are dropping as BRICS countries are unwilling to hold the USD. The U.S. pressing sanctions against other nations is what led to BRICS distancing themselves from the dollar. U.S. Treasury Secretary Janet Yellen said that sanctions hurt the dollar the most amidst plans for forming an alternative currency.
It is reported that Saudi Arabia also plans to aid BRICS nations in their effort to dethrone the dollar. Read here to know more details about why the oil-rich nation is taking on the dollar.
Also Read: BRICS Advancing To Eliminate U.S. Dollar Financial System
BRICS: Fewer Nations Willing to Hold U.S. Dollar as Supply & Demand Dips
The American economy is suffering from a debt ceiling and other countries don’t want to be a part of it by holding the USD. The U.S. debt increased as politicians are borrowing money to finance wars, give tax cuts, remove student loans, and expand federal spending, among other reasons. Therefore, the supply and demand for the dollar are dipping and could weaken further in the coming months. Billionaire Ray Dalio said in a recent interview that demand for the dollar is decreasing from BRICS and other countries.
Also Read: Will Canada & Mexico Join BRICS To Eliminate U.S. Dollar’s Dominance?
“There’s less desire to hold U.S. dollar-denominated debt, which means yes, less U.S. dollars (from other countries). So the supply and demand picture is worsening, particularly as we continue to have to sell them internationally to fund the deficit,” he said.
BRICS is an alliance of countries that compromise Brazil, Russia, India, China, and South Africa.