The rising power of the BRICS -- Brazil, Russia, India, China and South Africa -- could mean big trouble for the U.S. dollar's status as the world's global reserve currency. The countries have agreed to use local currencies to promote trade, cut transaction costs and lessen their dependence on the U.S. dollar.
From Zee News in India...
The five major emerging economies of BRICS -- Brazil, Russia, India, China and South Africa -- are set to inject greater economic momentum into their grouping by signing two pacts for promoting intra-BRICS trade at the fourth summit of their leaders.
The two agreements that will enable credit facility in local currency for businesses of BRICS countries will be signed in the presence of the leaders of the five countries, Sudhir Vyas, secretary (economic relations) in the external affairs ministry, told reporters here.
The pacts are expected to scale up intra-BRICS trade which has been growing at the rate of 28 percent over the last few years, but at $230 billion, remains much below the potential of the five economic powerhouses.
As we published earlier this week, "the BRICS continue to flex their muscles. A new agreement will promote the use of their own national currencies when trading with each other rather than the U.S. dollar."
“The idea is in line with many interests and economic exigencies in the world economy,” Yaroslav Lissovolik, the chief economist at Deutsche Bank told RT. “The euro and dollar are no longer seen as unquestionable monopolies in the role of reserve currencies. Clearly the world needs more reserve currencies.”
RT has some good coverage from the India summit, where the BRICS nations are shoring up their post-dollar reserve currency plans:
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