Brazil, Russia, India, China, and South Africa are teaming up to challenge the USD’s dominance and trigger the trend of de-dollarization.
This particular idea has been recently shared by Jim O'Neill, the ex-economist at Goldman Sachs. He said BRICS was to expand its bloc, which would inevitably lead to a situation when countries-participants were to oppose USD with their native currency.
Actually, we are now watching China taking this particular action considering what they are doing with the yuan right now. Russia also announced to support the strategy after saying the gas should be paid for in Rubles.
The reign of the USD negatively impacted and destabilized other nations' monetary policies. This is actually while the BRICS bloc will definitely counter this fact. Countries that form the bloc are not ready to put up with the dollar’s global dominance that has gone too far.
Besides, the FED takes lots of actions while tightening or loosening rates, which also influences the USD value causing a dramatic knock-on effect. We can see the real consequences of the Federal Reserve rate pursuit over and over again this year. The key policy rate was brought from around 0 to a 4.75%-5% range.
As a result, some nations have the dollar’s dominance burden on them taking into account growing government debts in USD with a destabilized monetary policy in the foreground.
The bloc made of Brazil, Russia, India, China, and South Africa is to oppose the situation and introduce a global multi-currency financial environment. Moreover, the organization plans to include other emerging nations such as Turkey, Mexico, Vietnam, Pakistan, Indonesia, and others.
BRICS established quite strict requirements in terms of membership. They refer to the climate situation, the healthcare field, trade, and finance. We may see dozens of countries eager to enter the bloc. Iran and Saudi Arabia are among the nations that are likely to join the group in the near future.
In other words, the organization is not just a group of countries with emerging economies and sizable populations. It is the bloc with potentially strong, climatically favorable, and resource-rich nations that can form a new global economic fist.
May the trading luck be with you!