BRICS Nations Pursue Gradual Shift Away From US Dollar

The BRICS nations have agreed to gradually shift away from the US dollar in international trade and commerce, moving towards greater use of local currencies. This decision was made at the recent New Delhi summit, where it was emphasized that this move will be a gradual process rather than an abrupt change.

The dominance of the US dollar is deeply ingrained in the global economy due to its widespread use in international trade and finance. However, growing concerns about the impact of financial sanctions have prompted countries to explore alternative payment mechanisms and reduce their dependence on the dollar-based system.

Several countries, including India, Brazil, Russia, and China, are developing their own local-currency payment systems, such as India's UPI, Brazil's Pix, Russia's SPFS, and China's CIPS. These systems aim to increase settlement in national currencies and reduce reliance on the US dollar.

While this shift may seem daunting, it is not a replacement of one dominant currency with another. Rather, it is a gradual process that aims to create a more diversified international financial system. The New Development Bank (NDB), established by BRICS, could play a larger role in financing infrastructure and development projects in emerging and developing economies.