In a groundbreaking move, Brazil's President, Luiz Inacio Lula Da Silva, announced at this week's BRICS Summit that the economic alliance, comprised of Brazil, Russia, India, China, and South Africa, is formally shifting away from the use of the US dollar for trade settlements. This strategic decision aligns with the bloc's ongoing efforts to promote the international use of local currencies.
The BRICS Summit, an event highly anticipated on the global stage, placed a spotlight on developments in both the realm of local currencies and the potential expansion of the alliance. With six additional countries slated to join the BRICS by 2024, this move promises to reshape the geopolitical landscape and significantly impact the performance of the US dollar in the coming months.
The proposal to abandon the US dollar was initially put forth by President Lula da Silva during this week's summit. He passionately advocated for the continued development of a unified BRICS currency. In his address to summit attendees, he emphasized that such a currency would provide the alliance with more payment options and reduce its vulnerability to external economic forces.
The call to move away from the US dollar in international trade has been consistent, but the addition of countries like Saudi Arabia, the United Arab Emirates (UAE), and Iran to the BRICS alliance has amplified its implications. As these nations consider transitioning large-scale oil sales away from the US dollar, the geopolitical consequences are poised to be not just significant, but potentially transformative.