BRICS & De-dollarisation: Motives and Outcomes

The tensions between the US and China are altering the calculations of actors, and more countries feel inclined to be better positioned and have better options. Under such geopolitical calculations, sanctions against Russia added to the mix. The dollar has been the world’s principal reserve currency since the end of World War II and is employed in more than 80 per cent of global trade. However, developments such as the US-imposed restrictions on exports of semiconductor technology to China, as well as the freezing of approximately half of Russia’s foreign currency reserves while removing major Russian banks from SWIFT have eventually led to calls for a shift away from dollar dominance in a more pronounced manner (Ismail, 2023). Although the creation of a BRICS currency is on the agenda, countries resort increasingly to use local currencies in their trade. A case in point is the trade between Russia and China and the use of Russian Rubles or Chinese yuan. It then led to the emergence of the term ‘petroyuan’, which stands to replace the ‘petrodollar’ that has been the norm since the end of the Bretton Woods.