BRICS Leaders Tackle Dependency on U.S. Dollar for Trade

The Deputy President of South Africa, Paul Mashatile, has said that the BRICS summit will start discussions on how to reduce dependence on the U.S. dollar. “Today the world takes notice of this bloc because it’s at the forefront of the global discourse to reduce dependence on the dollar,” he said.

However, he added that BRICS will not compete with the U.S. dollar and the West but is creating a level playing field.

“We are not here to compete with the West. We want our space in global business,” he said to business leaders at the summit.

In June, BNP Paribas SA said that the conditions to diminish the U.S. dollar remain more ripe than ever. It added that the dollar would be dethroned even if the process was “a slow, incremental burn.”

“I want to buy from India. Why should I use dollars?” said former Nigerian President Olusegun Obasanjo to a standing ovation.

“It’s a payment and settlement system that will allow me to buy whatever I want to buy in India, whatever I want to buy in Brazil, without looking for dollars,” he said.

Therefore, the BRICS alliance says it is committed to putting local currencies at the forefront to strengthen their native economies.

Promoting native currencies for trade is on the top agenda at the summit as the members aim to strengthen their native economies.

Russia’s President Vladimir Putin said that BRICS is developing effective mechanisms for global trade settlements and currency exchanges to gain financial control.

The payment mechanism will revolve around local currencies and sideline the U.S. dollar for cross-border transactions.

The new payment mechanism being developed by BRICS will provide seamless services to businessmen, multinational corporations, and entrepreneurs. The mechanism, which is currently under development, is expected to gradually phase out the old model of cross border trading using the dollar.

BRICS controls 20% of global exports, with a population of around 3 billion.

BRICS is an acronym for Brazil, Russia, India, China, and South Africa.