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<p>The BRICS bloc, an acronym representing the emerging economies of Brazil, Russia, India, China, and South Africa, has been making waves in the global financial landscape. Representing over 40% of the world’s population, these nations have been actively seeking ways to reduce their dependence on the US dollar and strengthen their economic ties. The New Development Bank (NDB), formed by the BRICS nations, stands at the forefront of this transformative journey.</p> 
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<h2 style="text-align: center;" id="de-dollarization-a-strategic-move">De-dollarization: A Strategic Move</h2> 
<p><strong>The Shift to Local Currencies</strong><br> In a recent revelation, the BRICS New Development Bank announced its strategic move to increase lending in member currencies. Dilma Rousseff, the bank’s president, shared that they aim for 30% of their lending to be in local tenders. This move is not just symbolic but also strategic. By August, the bank had already issued its first South African rand bond and unveiled plans to introduce Indian rupee bonds by October. Such initiatives signal a clear intent to diversify away from dollar-denominated lending.</p> 
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<h2 style="text-align: center;" id="why-de-dollarize">Why De-dollarize?</h2> 
<p>The motivation behind de-dollarization is multifaceted. For one, it offers member countries a shield against the volatility associated with exchange rates and US monetary policies. By reducing reliance on the greenback, these nations can potentially insulate themselves from external financial shocks and policy changes. Moreover, borrowing from the NDB comes without the strings often attached to institutions like the International Monetary Fund.</p> 
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<h2 style="text-align: center;" id="global-majority-s-aspirations-putin-s-perspective">Global Majority’s Aspirations: Putin’s Perspective</h2> 
<p>Russian President Vladimir Putin, in his remarks at a BRICS summit, emphasized that the bloc is on course to meet the aspirations of the global majority. He highlighted ongoing discussions about transitioning trade between member countries from the U.S. dollar to national currencies. This “objective, irreversible process of de-dollarization” is gaining momentum, Putin noted, signaling a significant shift in global trade dynamics.</p> 
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<h2 style="text-align: center;" id="challenges-and-past-dependencies">Challenges and Past Dependencies</h2> 
<p>Despite the strong de-dollarization rhetoric, it’s essential to recognize the challenges. Historically, <a href="https://walletinvestor.com/magazinadmin/brics-bank-president-urges-the-creation-of-a-global-south-focused-financial-system/" rel="noopener noreferrer nofollow">NDB</a>‘s lending practices have been heavily reliant on the US dollar. This dependency has not been without its pitfalls. Ties to Russia led to a Fitch Ratings credit downgrade for the bank last year. Western investors, wary of these ties, became reluctant to supply the bank with dollars. Given that two-thirds of its borrowing was dollar-denominated, the loss of this funding source made NDB’s debt servicing considerably more expensive.</p> 
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<h2 style="text-align: center;" id="looking-ahead-the-future-of-brics-and-de-dollarization">Looking Ahead: The Future of BRICS and De-dollarization</h2> 
<p>The BRICS nations are not just looking inward but are also considering expanding their bloc to include other countries, especially from Africa. This expansion could further strengthen their collective bargaining power and influence in the global financial arena.</p> 
<p>Furthermore, the recent Western sanctions on Russia have reignited the interest in de-dollarization among many emerging countries. As the weight of the dollar in central bank reserves sees a decline, the push within BRICS to reduce its use becomes even more pronounced.</p> 
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<h2 style="text-align: center;" id="conclusion-a-new-financial-order">Conclusion: A New Financial Order?</h2> 
<p>The BRICS bloc’s concerted efforts towards de-dollarization signify a potential shift in the global financial order. While the dollar’s dominance remains unchallenged in many areas, the winds of change are blowing. As the BRICS nations continue their quest to reduce dollar dependence, the world watches with bated breath, anticipating the dawn of a new financial era.</p>

The BRICS Bank’s Ambitious Quest for De-dollarization

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