The trade of the BRICS countries has increased by 56% over the course of five years, reaching $422 billion.
The BRICS countries are considering trading in local currencies, posing a challenge to the dominance of the US dollar worldwide.
The shift away from the dollar could have far-reaching consequences and a clear message: the traditional global financial hierarchy is facing a major shake-up. The trade fabric linking these diverse countries, rich in resources and industrial prowess, has been a stage for strong activity.
It is worth mentioning that Russia stands out with its crude oil exports, becoming a key player in supplying energy to developing countries. The collective strength of the BRICS bloc should not be underestimated; they form a powerful alliance with the ability to rebalance global trade power dynamics.
Moving away from the dollar
The year 2023 is expected to be a turning point for the BRICS alliance as it approaches reducing its reliance on the US dollar, signaling the dawn of a new era in international trade.
Such a radical shift in currency preference could send shockwaves through the US economy, potentially destabilizing supply and demand dynamics. If demand for the dollar diminishes, the threat of inflation, even hyperinflation, looms large, casting long shadows of uncertainty over the US financial landscape.
Domino effect on US financial sectors
The foundations of the US economic edifice are at risk of disruption if the BRICS alliance transitions to local currencies. Ten key financial sectors teeter on the edge, awaiting the potential domino effect that could arise from this monumental shift.
These sectors span from banking and finance services to energy markets, international trade, and thriving fintech corridors. The BRICS deviation from the dollar could lead to a series of consequences.
The banking industry may feel the initial tremors, leading to a chain reaction that could sweep through markets and destabilize economic sectors across the board.
Every link in the chain, from basic commodity prices to consumer goods, from technological inساميtion to tourism, could face testing pressures from the dynamics of the new currency.
As the BRICS countries progress in their global transactions, the dominance of the US dollar hangs on the precipice. The strategic maneuvers of the bloc towards a multi-currency system in 2024 may stimulate the gradual erosion of dollar dominance.
It is not only a matter of currency status but also the entire structure of US economic hegemony. While the BRICS group moves towards uncharted financial waters, the world watches, eagerly anticipating how these currents of change will reshape the global economy.
Disclaimer: The information provided is not financial advice. Chinwa.tech does not take any responsibility for investments made based on the information provided in this article. We recommend consulting a qualified specialist or financial advisor before making any investment decisions.