Kelvin Testimony Amachree
Russia recently demonstrated its commitment to de-dollarization by choosing to pay for $4 billion worth of arms from India in Indian Rupees instead of the US Dollar. This move is in line with the BRICS alliance’s objective of encouraging the use of local currencies in global trade and reducing reliance on the US Dollar.
By excluding the US Dollar from this transaction, Russia and India are paving the way for future trade agreements within the BRICS group. Such actions could potentially challenge the dominance of the US Dollar in the global market, prompting other countries to follow suit and opt for local currencies in their international transactions.
This decision’s implications are vast and could impact various sectors of the US economy. If the trend towards using local currencies gains momentum, the US Dollar’s status as the world’s primary reserve currency could be at risk, leading to a shift in global economic power dynamics. The US may need to reevaluate its economic strategies and assess the potential repercussions of a decline in the US Dollar’s supremacy.
BRICS: India & Russia Utilize Local Currencies for $4 Billion Trade, Moving Away From US Dollar
Russia and India have taken a significant step towards de-dollarization by concluding a $4 billion arms deal using India’s Vostro bank accounts, which facilitate trade in local currencies. This strategy allows Russia to circumvent US sanctions and engage in multi-billion-dollar transactions using local currencies. Similarly, India is leveraging Vostro accounts to settle trade with Russia, bolstering the local currencies of both countries.
The BRICS coalition is increasingly shifting away from the US Dollar, with new trade pacts being established in local currencies. This trend is expected to continue over the coming years, posing a challenge to the supremacy of the US Dollar. Developing nations are observing the BRICS model and advocating for de-dollarization, advocating for local currency settlements.
The utilization of Vostro accounts plays a vital role in this transition, enabling nations to trade in local currencies and decreasing reliance on the US Dollar. As more countries embrace this approach, the de-dollarization agenda is spreading globally, potentially reshaping the international trade landscape and diminishing the influence of the US Dollar.