This year, the BRICS nations, including Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates, are pushing even harder to ditch the US dollar in global trade. They’re all in on boosting their own currencies.
This big move is meant to pump up their economies and give them more control over their business dealings. They’re not just stopping with themselves; they’re persuading other developing countries to jump on the bandwagon and start using their own money for buying and selling across borders.
Massive Trade Deal Between China and Russia
Recently, China and Russia decided they’ve had enough of the US dollar. They signed a whopper of a trade deal, agreeing to use their own currencies for transactions worth up to $260 billion. This deal isn’t just for show. It’s about swapping commodities like oil and gas without giving a nod to the US dollar.
Payments will mostly be in Chinese Yuan, making up 95% of the trade, with the Russian Ruble and a sprinkle of Euros covering the rest. An analyst put it plainly, “This year, $260 billion worth of trade between China and Russia. No US dollar! It’s mostly Chinese yuan and Russian rubles. A few euros are in there too.”
This move away from the dollar? It’s going to catch on with all the BRICS+ members soon.
The strategy could shake up the financial world big time. If more countries start doing their business in their own money, the US dollar could lose its muscle. Looking ahead, the next ten years could see local currencies stepping up and gaining power.
Russia’s Big Oil Moves Amid Sanctions
Despite tough US sanctions, Russia’s oil business is booming. They’ve been selling oil on the cheap to buddies like Saudi Arabia since 2022, who then send it throughout Europe. This savvy move has kept Russia’s economy steady.
This April, Russia’s oil and gas revenue is expected to double to $14 billion from last year’s $7 billion, as per a Reuters report. Many countries are snapping up this cheaper Russian oil and paying with their local currencies, which helps their own economies too.
The report highlighted that Russia plans to rake in about 11.5 trillion roubles from oil and gas sales in 2024. That’s a 30% jump from 2023, bouncing back from a dip caused by weaker oil prices and the sanctions messing with gas exports.
Adding to the oil drama, BRICS newcomers like Iran are hitting record highs in oil exports, especially to their new pals in China. In the first three months of 2024, Iran shipped out 1.56 million barrels per day, mostly to China, bringing in a cool $35 billion annually.
The addition of Saudi Arabia, Egypt, Ethiopia, and the UAE to BRICS has only made the group stronger. These countries are now playing a big part in an oil market that BRICS is starting to dominate. This is helping the entire group, and with deals settled in their own currencies, they’re all seeing benefits that go beyond just money.
