This Monday, Sergey Lavrov, the Russian Foreign Minister, made it crystal clear while speaking in Moscow, according to a report from TASS. Russia and China have almost ditched the US dollar in their trade exchanges. The shift has been drastic, seeing over 90% of their trades now bypass the dollar, using their own currencies instead.
Beyond the Dollar
During a session with the Council of Heads of Russian regions at the Foreign Ministry, Lavrov highlighted the robustness of Russian-Chinese economic collaborations. “Our trade and economic cooperation with China is thriving, regardless of the Western attempts to disrupt us,” he declared. Lavrov detailed that this thriving cooperation has now moved beyond the dollar, with a massive 90% of transactions being conducted in the ruble and yuan.
The partnership spans various critical sectors. “Our engagement in the energy sector is continuously strengthening, and we are seeing a marked increase in the agricultural products heading to China,” Lavrov noted. He also pointed out the successful joint ventures spanning investments and industrial developments. “Both nations are reaping significant benefits from these endeavors,” he added, emphasizing the tangible mutual gains experienced across the board.
BRICS Vision: A World Without the Dollar
Shifting the focus from bilateral to multilateral, the BRICS boys are also setting the stage for a dollar-free trade environment. The alliance is getting ready to introduce a unified financial system by the second half of this year, as explained by Sergey Ryabkov, Russia’s Deputy Foreign Minister. This system plans to enable transactions within the bloc without the need for the US dollar.
Ryabkov shed light on the progress in digital asset integration within the bloc, crucial for circumventing the dollar in international deals. “We’ve embraced digital assets significantly this year, which plays a pivotal role in our strategy to minimize dollar usage,” he stated.
2023 was a big year for BRICS, with remarkable achievements in expansion and reducing dollar dependency, themes that dominated last year’s summit. The summit was marked by the addition of five new countries to the alliance and a firm commitment to promoting local currencies in trade. Ryabkov emphasized, “This isn’t the end; we are continually growing and refining our financial strategies.”
When asked about the financial direction under Russia’s BRICS chairmanship, Ryabkov revealed, “We’ve mulled over several strategies. One promising direction is developing a platform to unite the financial systems of BRICS countries.” He referred to this prospective platform as the ‘BRICS Bridge,’ envisioned to link the digital currencies and financial messaging systems of the member nations.
Moreover, Ryabkov noted that an important meeting earlier this year has cemented these plans within the broader framework of BRICS cooperation.
The momentum is building towards the 2024 summit scheduled in Kazan, Russia, this October. It is expected to extend invitations to numerous aspiring member countries, following the expressions of interest from around 35 nations. “These countries are eager to reduce their dollar reliance and shift to using their local currencies for international transactions,” explained Ryabkov.
The growing influence of BRICS and the increasing membership are putting pressure on the US dollar’s dominance in global economics.
However, not all interested nations will get the green light. The inclusion of new members is a collective decision by current BRICS countries, based on a consensus.
Check out TASS’ report here.
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