The oil-rich Saudi Arabia formally sent its application to join the BRICS alliance, reported Bloomberg. The South African BRICS ambassador Anil Sooklal confirmed that five Middle Eastern countries have shown their interest to join the bloc. The five countries are Saudi Arabia, the United Arab Emirates, Bahrain, Egypt, and Algeria. The nations export millions of oil barrels to the West every year settling transactions in the U.S. dollar.
Talks are in progress with Saudi Arabia looking to fund the BRICS bank, commonly called The New Development Bank (NDB). If the BRICS alliance accepts Saudi’s funding, it could usher in a new era of financial dominance with constant cash flow from the oil-rich nation. Saudi Arabia funding of the BRICS bank poses a challenge to the U.S. dollar’s supremacy as the global reserve currency.
BRICS: Saudi Arabia Challenges U.S. Dollar’s Global Currency Status
The BRICS bank President Dilma Rousseff said on Tuesday that the alliance is keen on receiving funds from Saudi Arabia. Moreover, the decision to allow Saudi cash flow for NDB will be jointly taken by the bloc of nations at the next summit in South Africa in August.
“As a former president of a developing country, I know how important multilateral banks are. And how much of a challenge it is to obtain finance or to raise funds on the scale needed to address social and economic challenges in our countries,” said Rousseff.
Rousseff stated that the BRICS bank aims to fund projects in local currencies thereon and not the U.S. dollar. The development could end reliance on the U.S. dollar and strengthen the BRICS currency on a global scale. Nonetheless, the dollar’s dominance is being chipped piece-by-piece as we know it and could make way for a new financial order.
BRICS is an acronym for Brazil, Russia, India, China, and South Africa. Nearly 25 countries have shown their interest to join the alliance. BRICS could soon turn to BRICS+ if more countries are allowed to enter the bloc and become financially more powerful.