Bank

<p>The BRICS nations’ efforts to dethrone the US dollar have not yet yielded the desired results, and they probably won’t, at least not anytime soon.</p> 
<p>A recent <a href="https://www.atlanticcouncil.org/programs/geoeconomics-center/dollar-dominance-monitor/" rel="nofollow noopener" target="_blank">report</a> from the Atlantic Council’s GeoEconomics Center reveals that the BRICS bunch has made absolutely no progress in weakening the dollar’s stronghold as the primary reserve asset worldwide.</p> 
<figure id="attachment_546997" aria-describedby="caption-attachment-546997" style="width: 100%" class="wp-caption alignnone">
 <img loading="lazy" decoding="async" class="wp-image-546997 size-full" src="https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.12.23.png" alt="BRICS' mission to dethrone US dollar fails to succeed" width="2435" height="1113" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.12.23.png 2435w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.12.23-300x137.png 300w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.12.23-1200x549.png 1200w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.12.23-768x351.png 768w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.12.23-1536x702.png 1536w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.12.23-2048x936.png 2048w" sizes="(max-width: 2435px) 100vw, 2435px">
 <figcaption id="caption-attachment-546997" class="wp-caption-text">
  Source: Atlantic Council
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</figure> 
<p>While India celebrates remarkable GDP growth and a resurgent economy, its currency, the rupee, continues to falter against the dominant US dollar. The Indian rupee recently sank to a new low of 83.63 but managed a slight recovery to 83.50 by the closing bell on Monday.</p> 
<p>The DXY index shows the dollar peaking at 105.45, outstripping 22 of the 23 surveyed local Asian currencies this month, pushing most to new lows, including the Japanese yen and Chinese yuan.</p> 
<h2 id="resisting-the-dollar-s-dominance">Resisting the dollar’s dominance</h2> 
<p>Despite these struggles, not all regional currencies have bowed to the dollar’s rally. The Hong Kong dollar stands out by holding its ground and even positioning itself advantageously compared to others.</p> 
<p>However, the overarching scenario remains grim for BRICS, with foreign investors pulling out $2.6 billion from Indian markets alone.</p> 
<p>The issue is the US dollar’s foundational role globally, dominating trade invoicing, currency transactions, and foreign reserve holdings. Any potential rivals like the euro or renminbi are simply too weak to dethrone it.</p> 
<p><img loading="lazy" decoding="async" class="alignnone wp-image-547000 size-full" src="https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.14.52.png" alt="" width="1900" height="1078" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.14.52.png 1900w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.14.52-300x170.png 300w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.14.52-1200x681.png 1200w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.14.52-768x436.png 768w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.14.52-1536x871.png 1536w" sizes="(max-width: 1900px) 100vw, 1900px"></p> 
<p>As the BRICS nations leave their initial mission of a shared currency to create new cross-border payment systems, they plan to usher in a more multipolar financial ecosystem.</p> 
<p>Leading this charge, China has been expanding its Cross-Border Interbank Payment System (CIPS), which now boasts 142 direct and 1,394 indirect participants, offering an alternative to SWIFT.</p> 
<h2 id="diversification-efforts-and-challenges">Diversification efforts and challenges</h2> 
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    <p>BRICS countries are currently discussing a new payment system within the group, focusing on digital currencies and swapping different types of money.</p> 
    <p>These discussions are about setting up a strong platform for exchanging currencies, though there are some challenges due to regulations and financial stability.</p> 
    <p>The global share of China’s renminbi has dropped to 2.3% from 2.8% last year despite efforts to inject more money into the market. This drop may be due to increasing worries about China’s role in international conflicts and its tense relations with G7 countries.</p> 
    <p><img loading="lazy" decoding="async" class="alignnone wp-image-547005 size-full" src="https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.14.15.jpg" alt="" width="1920" height="1029" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.14.15.jpg 1920w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.14.15-300x161.jpg 300w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.14.15-1200x643.jpg 1200w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.14.15-768x412.jpg 768w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.14.15-1536x823.jpg 1536w" sizes="(max-width: 1920px) 100vw, 1920px"></p> 
    <p>As confidence in traditional reserve currencies decreases, about one-third of all central banks plan to increase their gold reserves in 2024, moving away from the euro and dollar because of the political risks they carry.</p> 
    <p>Among the BRICS currencies, the renminbi has the most potential to challenge the dollar in global trade and as a stored value. Thanks to daily trades between the Central Bank of Russia and the People’s Bank of China, it’s now the most traded currency in Russia.</p> 
    <p>In Brazil, the Central Bank has set up both a renminbi swap line and a clearinghouse to make it easier to handle transactions in local currencies with China, but the dollar still rules over Brazil’s foreign exchange reserves and trading settlements.</p> 
    <p><img loading="lazy" decoding="async" class="alignnone wp-image-547003 size-full" src="https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.16.16.png" alt="" width="1920" height="1023" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.16.16.png 1920w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.16.16-300x160.png 300w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.16.16-1200x639.png 1200w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.16.16-768x409.png 768w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/Screenshot-2024-06-25-at-19.16.16-1536x818.png 1536w" sizes="(max-width: 1920px) 100vw, 1920px"></p> 
    <p>On the other hand, India is broadening its trade agreements to include rupee trading with major partners like the UAE and Russia, avoiding moves that would boost the renminbi’s global standing.</p> 
    <p>Saudi Arabia has started to open up to trading oil in renminbi with China but hasn’t completely moved away from the dollar, showing a careful approach to reducing dollar dependency.</p> 
    <p>The UAE is actively negotiating bilateral currency transactions with large emerging markets, taking advantage of its financial markets and the dirham’s easy exchangeability to the dollar.</p> 
    <p>Meanwhile, Iran is exploring alternatives to the SWIFT system by promoting trades in its own currency, the rial, as well as the renminbi, ruble, and rupee, although these efforts aren’t heavily supported by Chinese financial systems.</p> 
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<p style="text-align: right"><em>Jai Hamid</em></p>

BRICS’ mission to dethrone US dollar fails to succeed

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