Major Oil Exporters Join BRICS: Experts predict trade to shift from the US currency to local currencies when Iran, Saudi Arabia, and the UAE join the BRICS alliance. Speaking anonymously, a Shanghai oil industry member suggested the petrodollar is losing relevance. These oil-producing nations will join BRICS on January 1, 2024, to create a possible autonomous transnational monetary system.
BRICS once consisted of Brazil, Russia, India, China, and South Africa. Countries with 60% of the world’s oil and gas will join soon. This shift is important and might affect how money operates worldwide, especially if the union lets people pay in their currency. The 15th BRICS summit urged people to utilize their currencies instead of the US dollar and euro.
Open data reveals BRICS trades in US dollars and euros are falling, supporting the trend. When oil starts trading in currencies other than the dollar, US Treasury bonds, a longtime benchmark for foreign currency reserves, may shift. The source also suggested selling US dollars and Treasuries faster.
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Saudi Arabia’s US Treasuries plummeted to $108.1 billion, the lowest amount in six years. They net sold $80 billion of US debt. The UAE also paid off over $4 billion in US debt, according to the Treasury.
Several experts blame the US for this dollar decline. Over time, US unilateral financial penalties have forced many countries to consider quitting the currency. They believe uncontrolled quantitative easing and large interest rate spikes have damaged global economic faith in the US. “The US is overdrawing on the credit of the US dollar,” stated Beijing Securities employee Wang.
Wang, reflecting on the changing globe, said the US dollar was the only suitable alternative. The development of groups like the New Development Bank of BRICS makes local currency cross-border deals easier and cheaper. Wang also cautioned that the dollar’s value could fall due to the US’s chaotic politics and economy, as well as its mounting government debt and economic uncertainties.
The US dollar may lose its status as the world’s reserve currency because the BRICS group grows more to include oil-exporting nations. This has numerous impacts, but one thing is sure: the time may end when the US dollar is the most significant currency without competition.
Our Reader’s Queries
What new countries are joining BRICS?
In January 2024, BRICS welcomed five new countries into its fold – Saudi Arabia, the United Arab Emirates, Egypt, Iran, and Ethiopia. However, Argentina declined the invitation to join BRICS, despite being offered one in August of the previous year.
Is Mexico going to join BRICS?
Mexican President Andres Manuel Lope Obrador addressed rumors of Mexico’s potential membership in BRICS ahead of the August Summit. He made it clear that Mexico has no intention of joining the association, stating, “We are not going to participate in this bloc.”
Did Saudi join BRICS?
On Tuesday, Saudi state TV announced that the country had officially become a member of the BRICS bloc of nations. The decision was made after careful consideration and review of the details, as previously stated by the foreign minister in August. The joining date of January 1st was met and the appropriate decision was made.
Did Argentina join BRICS?
Argentina’s President, Javier Milei, has decided to pull out of the Brics club of nations, which the country was set to join. This move comes as a surprise to many, as the Brics group is seen as a promising platform for emerging economies to collaborate and grow together. However, Milei’s decision may have been influenced by his government’s focus on domestic issues and the need to prioritize the country’s own economic development. It remains to be seen how this decision will impact Argentina’s relations with the Brics nations in the future.