The BRICS alliance is looking to uproot the U.S. dollar from the world’s reserve currency status. The main agenda of the bloc is to replace the U.S. dollar with local currencies and make developing countries the sole leader of the global economy. Leading investment bank UBS has forecasted the future of the U.S. dollar amidst the onslaught of the BRICS alliance.
Also Read: BRICS: New Country Plans To Ban the US Dollar for Trade
The UBS prediction touches the U.S. dollar’s prospects for years to come amid the ambitious aspirations of BRICS. The next 10 years play a crucial role as developing nations look to lead the global economy. Read here to know how many sectors in the U.S. will be affected if BRICS ditches the dollar for trade.
Also Read: BRICS Expansion: New Country Shows Interest To Join the Alliance
BRICS: UBS Predicts The U.S. Dollar’s Reign Will Live Longer
UBS has forecasted a bullish picture for the U.S. dollar despite BRICS launching the de-dollarization agenda. The forecast indicates that the U.S. dollar will continue its domination for a longer time but will make room for competitors along the way. According to UBS, the U.S. dollar holds significant weight in three financial landscapes that local currencies lack. The assertion is grounded in three key factors below:
Also Read: US Dollar Gives a Major Blow To BRICS Nations’ Currencies
The significant three factors are:
- Unparalleled Liquidity
- Stability and Safety
- Sticky Global Currency Regimes
These three important financial stabilities are what makes the U.S. dollar stand apart from the BRICS nations’ currencies. “All in all, we think the dollar’s reign will live on. At the same time, it will likely make some room for competitors (BRICS) along the way,” predicted UBS.
Also Read: BRICS Considers Payments in National Currencies
As per UBS, the U.S. dollar will remain the cornerstone of the global financial system for the foreseeable future. Local currencies and the BRICS de-dollarization agenda will not pull the USD down in the coming decades. The USD will reign supreme and continue being the world’s de facto currency for trade, commerce, and cross-border transactions.