The BRICS coalition has announced a significant development in its efforts to reshape global trade dynamics by reaching a “very good agreement” to facilitate international trade using national currencies which is aimed at reducing reliance on the U.S. dollar and enhancing economic cooperation among member states.
Leaders from the BRICS nations—Brazil, Russia, India, China, South Africa, and the recently joined members Iran, Egypt, Ethiopia, and the United Arab Emirates—have emphasized the importance of this agreement in promoting trade that aligns with their economic interests.
The initiative is part of a broader strategy to bolster intra-BRICS trade, which has seen significant growth over recent years.
The agreement reflects ongoing discussions within BRICS about “de-dollarization,” or reducing dependence on the U.S. dollar for international transactions with the economic bloc aims to create a more balanced global trading environment and enhance the sovereignty of member nations in their economic dealings.
The Iranian Central Bank Governor Mohammad Reza Farzin added that, “By conducting trade in local currencies, BRICS countries aim to deepen economic ties and foster mutual growth.”
Despite the optimistic outlook, challenges remain in implementing this agreement. The existing global financial infrastructure, which heavily relies on the U.S. dollar, poses significant hurdles. Additionally, member countries will need to address concerns regarding currency stability and exchange rates.
BRICS has been increasingly vocal about reforming global financial systems dominated by Western powers. The coalition represents approximately 40% of the world’s population and accounts for a substantial share of global GDP and trade.
