China and Russia to Push De-dollarization Agenda in BRICS 2024

China and Russia are likely to discuss the agenda of de-dollarization in BRICS 2024 as both countries have agreed to use local currencies up to $260 billion. To counter the plan of two influential BRICS members in favor of de-dollarization, the United States is playing the sanctions card against China and Russia. What will be the impact of de-dollarization on the economies of BRICS nations? Could China become the world’s economic power? Let’s try to find the answers by analyzing the data.

China and Russia agree to use local currencies up to $260 billion

Within BRICS, China and Russia have openly agreed to replace the US dollar in global trade and transactions. They are also convincing other developing countries to follow suit and settle payments in local currencies for cross-border transactions.

Recently, it has been reported that China and Russia have sealed a trade agreement where they will use local currencies up to $260 billion. The trade deal will be initiated to settle payments in exchange for products purchased between the two countries. See yearly trends of China and Russia trade.

BRICS market share in global trade

BRICS, the regional partnership, comprises Brazil, Russia, India, China, and South Africa. It is an emerging group in the multi-polar world. One of its aims is to prioritise local currencies over the established US dollar legacy. The USD currency will return to its homeland, leading to hyperinflation in America. It is likely to impact key sectors in the United States, namely banking, foreign exchange, tourism, and consumer goods.  Here’s BRICS’ share in global trade.

Could China soon become the leading economic power thanks to BRICS?

China’s ambition is to dethrone the United States of America, which is currently the world’s leading economic power by accelerating the de-dollarization of its trade with Russia. China has announced an economic growth of 5% in 2024. It is one of the largest investors in gold in 2024.

To counter the plan of two influential BRICS members in favour of de-dollarization, the United States is playing the sanctions card against China and Russia. America threatens Chinese banks that conduct transactions with Moscow with sanctions, forcing them to reject payments in the Russian ruble. These are threatened with being accused of aiding the Kremlin to fight Ukraine.  

BRICS is shedding its obedient behaviour towards US dollar-led international trade. On the other hand, it will have potential implications on several financial sectors in the United States leading to a market decline in the coming years.

What could be India’s stand?

India shared strong ties with both the United States and Russia. It believes in the democratization of international trade and no monopolization of the global currency. India is required to tread carefully to balance both extremes. Multipolarity is the essence. So, the idea of a multi-polar world is the key to de-dollarisation, where BRICS countries will end their reliance on the US dollar.

According to a report, the BRICS 2024 summit will focus mainly on the de-dollarization agenda. Likely, China and Russia will most definitely endorse their concept of decimating the dominance of the US dollar, which may be detrimental to the US economy.

The BRICS 2024 summit is scheduled to be held in October in the Kazan region of Russia. The 16^th summit will see four new countries being a part of the meeting, including the United Arab Emirates (UAE), Iran, and Ethiopia. If Saudi Arabia joins the bloc, it could also attend the summit and this will further strengthen the de-dollarization initiatives.