In 2023, trade among BRICS nations surged dramatically following the establishment of new agreements and the renewal of existing partnerships. These trade pacts are propelling the alliance onto the global stage due to the immense scale of cross-border transactions.
New statistics from the World Bank project that trade between BRICS countries will approach $500 billion by 2024. Although this value remains below the global trade average, BRICS' figures are steadily increasing. The coalition is laying the groundwork for potential comprehensive trade agreements that could fortify their respective economies.
An essential strategy BRICS is currently harboring involves their de-dollarization initiative. Initially focused on solidifying trade agreements and fostering their growth in the coming years, BRICS aims to deploy their de-dollarization strategy once the groundwork is established. Their intent is to settle trade using local currencies.
The overarching goal of BRICS is to eventually sever connections with the US dollar and promote the strength of local currencies. As trade volumes swell within BRICS, the perceived threat to the US dollar intensifies. China and Russia, key members of BRICS, are assertively pursuing de-dollarization measures, striving to actualize this vision.
This maneuver holds the potential to significantly impact the US dollar and potentially trigger a recession in American markets.
BRICS: Oil Trade Could Be The Next Big Deal
In August of this year, during the 15th summit in Johannesburg, BRICS welcomed five oil-producing countries into its fold. Joining BRICS in 2024 as oil-exporting nations are Saudi Arabia, the UAE, Egypt, Iran, and Ethiopia. Should BRICS push for other developing nations to use local currencies for settling oil transactions, the impact on the US dollar would be severe.
Although this eventuality hasn't materialized yet, it might not be too far in the future. It's crucial to recall that BRICS had previously declared its "long-term goal" of removing the US dollar from its global currency status.