Tag: BRICS CURRENCY AND TRUMP’S THREAT

The U.S. President-elect, Donald Trump, has threatened BRICS nations (Brazil, Russia, India, China, and South Africa) with 100% import tariffs if they create their own currency or back an existing currency to replace the U.S. dollar as the world’s reserve currency. What Provoked Trump's Reaction? Trump emphasized that the U.S. seeks a commitment from BRICS countries to not challenge the dominance of the U.S. dollar. The U.S. perceives this move as a threat to its global economic influence. Statements from BRICS Leaders Russia: President Vladimir Putin, during the BRICS Summit in Kazan, stated that the dollar is being used as a "weapon," which has prompted efforts to reduce dependency on it. Brazil: President Luiz Inácio Lula da Silva supported the creation of a new BRICS currency to provide alternatives and reduce vulnerabilities. Implications of a BRICS Currency Pros Reduced Dollar Dependency: Decreases economic vulnerabilities and exposure to dollar fluctuations. Enhanced Sovereignty: Offers greater control over monetary policies and trade. Diversified Financial System: Encourages a multipolar economic order. Cost Efficiency: Eliminates currency conversion costs in intra-BRICS trade. Stronger Alliances: Strengthens regional cooperation and integration. Cons Economic Imbalance: Dominance of larger economies like China may marginalize smaller members. Implementation Challenges: Requires extensive coordination and may take years to operationalize. Global Resistance: Could struggle to gain global trust and challenge the dollar’s hegemony. U.S. Retaliation: Risk of sanctions and trade disruptions from the U.S. Internal Conflicts: Potential disagreements over governance and currency valuation. Internationalization of the Rupee India's Perspective: India has taken steps to internationalize the rupee and reduce reliance on the U.S. dollar. The Reserve Bank of India (RBI) allowed invoicing and payments in rupees for international trade, strengthening the currency’s role globally. Russia's Collaboration: Russia’s trade settlements with India increasingly use the rupee and the ruble instead of the dollar. Over 90% of bilateral trade between Russia and China is settled in their own currencies.

Tag: BRICS CURRENCY AND TRUMP’S THREAT

BRICS CURRENCY AND TRUMP’S THREAT

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