{"id":325229,"date":"2025-01-30T21:18:45","date_gmt":"2025-01-30T15:48:45","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=325229"},"modified":"2025-01-30T21:18:45","modified_gmt":"2025-01-30T15:48:45","slug":"brics-plus-seeks-alternatives-to-us-dollar","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/brics-plus-seeks-alternatives-to-us-dollar\/","title":{"rendered":"BRICS Plus seeks alternatives to US dollar"},"content":{"rendered":"

Source<\/strong>: The post BRICS Plus seeks alternatives to US dollar has been created, based on the article \u201cBrics payments system: A real threat to dollar?<\/strong>\u201d published in \u201cBusiness Standard\u201d<\/strong> on 30th January 2025<\/p>\n

UPSC Syllabus Topic:<\/strong> GS Paper2- International Relations-Bilateral, regional and global groupings and agreements involving India and\/or affecting India\u2019s interests.<\/p>\n

Context<\/strong>: The article discusses BRICS+ efforts to reduce reliance on the US dollar by using local currencies for trade. It highlights challenges like economic diversity, regulatory issues, and US resistance. It emphasizes BRICS+ developing digital payment systems to strengthen financial independence and trade.<\/p>\n

For detailed information on India should quit the Brics<\/strong> read this article here<\/a><\/p>\n

What is BRICS+ and Its Expansion?<\/strong><\/h2>\n
    \n
  1. BRICS+ is a group of emerging economies originally consisting of Brazil, Russia, India, China, and South Africa.<\/li>\n
  2. In 2024, the United Arab Emirates, Egypt, Ethiopia, and Iran joined, followed by Indonesia in January 2025. This expansion brings its total to 10 members and nine partners.<\/li>\n
  3. Together, they represent about 55% of the global population and 40% of the global GDP at purchasing power parity.<\/li>\n<\/ol>\n

    Why is BRICS+ Looking for Alternatives to the US Dollar?<\/strong><\/h2>\n
      \n
    1. Reduction of Dependence:<\/strong> BRICS+ aims to minimize reliance on the US dollar due to the economic sanctions that affected Russia during the Ukraine crisis, where access to SWIFT was denied.<\/li>\n
    2. Diverse Economic Engagement:<\/strong> By settling trade in local currencies, BRICS+ countries aim to enhance economic sovereignty and reduce transaction costs, improving trade efficiency among members.<\/li>\n
    3. Developing Financial Alternatives:<\/strong> The introduction of digital payment systems and the push to use the Chinese RMB, which accounts for about 2% of total cross-border transactions, reflects a strategic move to diversify financial interactions beyond the dollar.<\/li>\n<\/ol>\n

      What Are the Challenges Facing BRICS+?<\/strong><\/h2>\n
        \n
      1. Diverse Political and Economic Systems<\/strong>: Members have different governance models and economic structures, making cooperation difficult.<\/li>\n
      2. US Dollar Dominance<\/strong>: The dollar accounts for most global forex reserves and trade invoices, limiting alternatives.<\/li>\n
      3. Risk of US Sanctions<\/strong>: The US has threatened 100% tariffs if BRICS+ pushes de-dollarisation.<\/li>\n
      4. Limited RMB Use<\/strong>: The renminbi is used in only 2% of global transactions, restricting its global impact.<\/li>\n<\/ol>\n

        What Is the Future Potential of BRICS+ Initiatives?<\/strong><\/h2>\n
          \n
        1. Cross-Border Payments<\/strong>: BRICS+ is developing a payment system to reduce reliance on the US dollar. This is important after the West blocked Russia from SWIFT.<\/li>\n
        2. Digital Payment Growth<\/strong>: China, India, Russia, Brazil, and Indonesia have advanced digital payment systems. India\u2019s Unified Payments Interface supports local currency trade.<\/li>\n
        3. Regional Trade Expansion<\/strong>: RMB usage is rising in Asia, Latin America, and Africa, strengthening financial independence.<\/li>\n
        4. Risk Diversification<\/strong>: BRICS+ payments aim to reduce trade risks, not replace the dollar immediately.<\/li>\n<\/ol>\n

          Question for practice:<\/strong><\/p>\n

          Examine the reasons behind BRICS+ efforts to reduce reliance on the US dollar and the challenges they face in achieving this goal.<\/p>\n","protected":false},"excerpt":{"rendered":"

          Source: The post BRICS Plus seeks alternatives to US dollar has been created, based on the article \u201cBrics payments system: A real threat to dollar?\u201d published in \u201cBusiness Standard\u201d on 30th January 2025 UPSC Syllabus Topic: GS Paper2- International Relations-Bilateral, regional and global groupings and agreements involving India and\/or affecting India\u2019s interests. Context: The article… Continue reading BRICS Plus seeks alternatives to US dollar<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230],"tags":[10503,212,239],"class_list":["post-325229","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","tag-business-standard","tag-gs-paper-2","tag-international-relations","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/325229","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=325229"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/325229\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=325229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=325229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=325229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}