De-dollarization of the BRICS: a chimera or a power play?

Xi Jinping and Vladimir Putin’s goal of reducing America’s global dominance depends on challenging the dollar’s status as the world’s currency. Other BRICS leaders, such as Luiz Inácio Lula da Silva of Brazil, Ali Khamenei of Iran, and Cyril Ramaphosa of South Africa, support this anti-American stance. Egypt, despite occasionally aligning itself with the United States, is also seeking to exclude the possibility of future sanctions by diversifying away from the dollar. Ethiopia’s economic impact is minimal, while Saudi Arabia and the United Arab Emirates continue to benefit from the global primacy of the dollar.

Non-traditional media have widely covered supposed de-dollarization efforts within the BRICS, with headlines proclaiming that “BRIC currency exchange is a global game changer” and “BRICS boost currency exchange with 29 countries worth 550 billion dollars.” However, these reports are mostly speculative, and eye-catching figures like $550 billion tend to be aggregates of current trade volumes, devoid of any tangible backing in the form of official commitments or proposals from Member States.

The idea of ​​dedollarization is not new; Russia, China and other countries have been discussing it for decades. However, there have not yet been any significant movements in this direction. More concrete measures taken include the establishment of swaps and the use of the yuan in trade with heavily sanctioned members Russia and Iran (both will be explained later in this article), but this should not be confused with any global move away from the dollar. .