Foreign Media: India Opposes the De-Dollarization Process of BRICS

At the previous BRICS summit held in Kazan, Russia last year, Putin personally emphasized the necessity of increasing the use of national currencies in financial and commercial exchanges, which is the second option for BRICS countries to slightly reduce their dependence on the US dollar. However, even so, the de-dollarization of these economies may still need to wait.

The current situation is that BRICS countries are gradually partially de-dollaring, meaning that the share of US dollar foreign exchange reserves of the five BRICS countries has been weakened, and they have turned to buying gold. At the same time, the proportion of US dollar cross-border bank claims in BRICS countries has decreased from 67% in 2016 to 55% now.

37% of global commodity trade in BRICS countries is priced in local currencies. Now, 90% of trade between India and Russia is settled in local currencies.

But all this is not enough to replace the dominant position of the US dollar, especially since India clearly stated in May last year that it supports BRICS reforms and has no interest in initiating a de-dollarization process.

India's Foreign Minister Subrahmanyam Jaishankar once said in mid-June that there are currently no proposals for creating a BRICS currency. This shows that BRICS countries still rely on US dollar funding.

Alternative Currency

Analysts point out that if BRICS countries want to replace the US dollar, they must find an alternative currency.

Trump's Unpredictability

Another uncertainty is that the de-dollarization of BRICS countries may come from the United States itself.

Maurice, former chief economist of the International Monetary Fund, pointed out the dangers of Trump's economic policies at the headquarters of the Bank for International Settlements on June 29.

Maurice said, "There are two main factors that will reduce the role of the US dollar globally. First, the trade wars launched by the Trump administration will reduce the US imports and exports, thereby reducing the US' integration into the global economy, thus limiting the international role of the US dollar. Second, the budget deficit and growing debt burden of the US, as the US dollar depreciated in the first half of this year, showing that investors' interest in US dollar-denominated assets has decreased."

Trump's government strategy is likely to successfully weaken the dominant position of the US dollar globally, making it easier for BRICS countries to develop their economies.

Additionally, Trump wrote on the social media platform Truth Social on July 6, "Any country that aligns with the anti-US policies of BRICS will be subject to an additional 10% tariff. There will be no exceptions to this policy."

BRICS countries believe that President Trump's "indiscriminate" trade tariff measures could also harm the global economy.

Source: rfi

Original: https://www.toutiao.com/article/1837009368235011/

Statement: This article represents the views of the author."