The world is keeping an eye on the meeting of BRICS countries in Kazan, Russia. BRICS countries want to put themselves at par with the rich countries of the world. The world currently depends on the dollar for currency. 90 percent of transactions take place in dollars only. BRICS countries want to promote trade in their own currency, so that dependence on the dollar can be eliminated. According to American market exchange Nasdaq, BRICS countries are emphasizing on their own currency instead of dollar. Experts are calling this process de-dollarization.
the value of the dollar will decrease
According to the Federal Reserve, America’s central bank, between 1999 and 2019, 96 percent of dollars were used in international trade. 74 percent was used for trade in the Asia Pacific region while 79 percent was used in other parts of the world. BRICS countries are fast growing economies. In such a situation, the dollar’s strength will definitely be hit by the BRICS currency.
Also read: What will be the impact on the common people due to the sharp fall in the rupee?
Everyone is looking for options
According to the American market exchange Nasdaq, all the countries of the world are looking for an alternative to the dollar. China and Russia trade in their own currency. India is also making agreements with many countries to use its currency. Many countries including Kenya and Malaysia are considering de-dollarization as better because it will provide them many economic benefits.
advantage of own currency
1. Freedom from trade under American rules to the world.
2. BRICS countries have full opportunity in the open market.
3. End dependence on dollar-euro for business transactions.
4. Due to American policies, restrictions will be put to rest.
5. Trade opportunities for developing countries will increase rapidly.
European countries including America are dependent on BRICS countries for many things. Russian President Vladimir Putin has said that the economy of BRICS countries is more than 60 trillion dollars. America’s 29, while the total economy of European countries is 19.35 trillion dollars. Let us know how important and useful the BRICS countries are for the rich countries of the world.
India: Exports electrical, electronic and engineering related goods along with gems, jewellery, pharma and petroleum products to America and Europe. It exports essential commodities worth 78 billion dollars to America and 124 billion dollars to European countries annually.
China: Europe is dependent on China for parts related to machines and vehicles. Exports elements used in making chemicals and medicines. America buys railway parts. China sells goods worth $200 billion to America annually.
Russia: America used to buy petroleum products, gas, platinum, and fertilizers. Russia continued to sell products worth $20 billion to America annually. European countries buy minerals, fuel, oil, gas, steel, rubber, plastic products, grains. The total turnover is 195 billion dollars.
South Africa: America buys 24 percent of the mineral products. Vegetables, textiles, packaged food, equipment and machines are exported on a large scale. Annual turnover of ten billion dollars. Europe buys essential commodities worth about $27 billion.
UAE: America is dependent on it for oil, chemicals, luxury vehicles, boilers etc. UAE sells goods worth $12 billion to America annually. Europe is completely dependent on oil, lubricants and other petrochemicals. The total turnover is about 15 billion dollars.
