Intra-BRICS Trade Increased by 56% in 2017-2022: Media
BRICS unites the world's largest developing economies — Brazil, Russia, India, China, and South Africa. In August, the bloc officially approved the accession of Argentina, Iran, Saudi Arabia, Ethiopia, Egypt and the United Arab Emirates, active from January 1, 2024. BRICS is seen as a counterweight bloc to Western economic domination.
Trade between the five BRICS countries (Brazil, Russia, India, China, and South Africa) increased by 56% between 2017 and 2022; the total five-year turnout stands at around $422 billion, as reported by the financial media Watcher Guru.
The growth in trade in the past five years is nothing out of the ordinary; however, it may have a wider impact as the BRICS
countries look to end their dependence on the US dollar. As the demand for trade between the BRICS countries increases, there is a high probability that the group will pay in local currencies rather than in US dollars.
media said that this trend could threaten the US dollar dominance and reduce the supply and demand dynamics of currencies in international markets.
"The development puts the prospects of the US dollar in jeopardy as BRICS might initiate all trade in local currencies. Cross-border transactions in their respective local currencies worth $400 billion could add pressure on the US economy" according to the media.
In August, during the 15th BRICS Summit, Russian Foreign Minister Sergey Lavrov said that BRICS member states are currently focused on working out mechanisms of mutual trade that would end their dependence on foreign reserve currencies such as the US dollar.
Ten US Sectors Threatened
A reduced demand for US dollars
could cause the US economy to run deficits, pushing up US prices and increasing the risk of hyperinflation, according to the outlet.
"The US dollar remains at a crossroads as BRICS looks to take the driver's seat of the global economy. If BRICS announces to use local currencies for transactions in 2024, the US dollar dominance will gradually decline," the financial media stated.
According to the outlet, 10 financial sectors in the United States will be affected if the BRICS use local currencies
and not the US dollar. Sectors include banking, commerce, foreign exchange and tourism, among others.
The banking sector could be the first to suffer a blow that could eventually spread to the markets. Once the financial markets are affected, the domino effect could spread to all sectors. This could lead to a financial catastrophe.
BRICS, an economic bloc seen as a counterweight to Western economic domination, derives its name from Brazil, Russia, India, China and South Africa. This year's summit of the group was the largest meeting of heads of state and government of the Global South and it was crowned with the addition
of six new member countries, including two African ones.