BRICS Alliance Ditches Dollar for Local Currencies in Major Shift

The BRICS alliance has made significant progress in reducing its dependence on the US dollar for trade. According to a report by Pradip Dhir, director of Pranan Consulting, only 35% of cross-border transactions within the bloc are still denominated in US dollars. This marks a decline of 65% from previous years and represents a major shift towards using local currencies for international payments.

The use of national currencies has been accelerated by bilateral agreements between countries, such as trade flows between China and Russia settled in yuan and rubles. The Chinese government has also established special contractual systems to facilitate transactions with partners, further reducing the need for US dollars. Saudi Arabia's decision to settle oil contracts in yuan has also contributed to this trend.

The Trump administration has responded to this shift by imposing punitive surcharges of up to 100% on member countries continuing to execute their dedollarization agenda. However, the bloc has not been deterred and is instead reassessing its short-term priorities while maintaining its commitment to using local currencies for trade.