BRICS 2 Countries Ditch US Dollar: Local Currencies Rise for Imports

The global financial landscape is shifting. After BRICS, a new alliance has kick-started the de-dollarization process and is using local currencies for trade and not the US dollar. This move signals a significant departure from traditional reliance on the US dollar for international transactions, particularly within the BRICS sphere and beyond.

This trend is exemplified by recent developments in trade between Maldives and key BRICS members. The Commonwealth of The new $1.5 billion import bill by Maldives will see BRICS members India and China settle 50% in local currencies. Therefore, $750 million worth of cross-border transactions will be paid by BRICS countries India and China agreed in the latest trade deal to use local currencies for import settlement with Maldives and not the US dollar. Maldives said on this arrangement will promote economic stability and lessen dependence on the US dollar.

The Benefits of Local Currency Trade Agreements

Why are countries increasingly opting for local currency settlements? The advantages are multifaceted:

• Boost Domestic Economies: Increased use of local currencies can strengthen domestic businesses and financial institutions.
• Reduce Vulnerability: Diversifying away from the US dollar insulates countries from fluctuations in the dollar's value and US monetary policy.

The decision by these BRICS nations to utilize local currencies for imports marks a pivotal moment in the ongoing de-dollarization movement. By embracing alternative payment methods, these countries are paving the way for a more multi-polar and resilient global economy. This shift highlights a growing desire for greater financial autonomy and a reduced reliance on the US dollar in international trade, creating new opportunities for economic growth and collaboration among participating nations.