Sharma elucidated how US penalties are weakening the dollar and bolstering substitutes
BRICS does not pose a menace to the dollar; the US itself does, by employing sanctions in an overly expansive manner. This viewpoint was shared by Bloomberg contributor Mihir Sharma, addressing Trump's latest warnings directed towards the association.
As you may recall, the Republican urged that BRICS refrain from establishing a currency capable of superseding the dollar and menaced imposing higher trade duties as a consequence.
However, Sharma posits that a much larger apprehension for the US resides in the reality that the bloc’s member nations are already engaged in trade transactions utilizing their own national currencies.
“BRICS—along with others—will persist in pursuing avenues to execute international transactions without reliance on dollars. Their intention isn’t to damage the US economy or contest the dollar’s preeminence. They aspire to develop a segment of the financial infrastructure that is immune to US jurisdiction.
Nations such as the United Arab Emirates, which have historically functioned as monetary intermediaries between opposing geopolitical factions, have been endeavoring towards this for at least a decade. Nevertheless, this aim is attaining heightened urgency in an epoch characterized by trade conflicts and geopolitical fragmentation,” the columnist pens.
One of the globe’s most substantial economies, India, is also enduring consequences stemming from US dollar-related penalties, as it encounters increasing challenges in procuring petroleum from nations like Venezuela and Russia. Hence, “even the most pro-Western functionaries in Delhi comprehend the necessity of devising payment systems that are not under US dominion.”
Moreover, “the quantity of dual-purpose commodities and financial bodies subject to US penalties is augmenting almost on a monthly basis.” Even institutions enjoying Western support, for instance, the Bank for International Settlements, have “inaugurated value transfer initiatives devoid of the US dollar.”
“No such endeavors were undertaken while the remainder of the world perceived the US dollar as a collective asset… Immoderate application of influence – through unwarranted penalties, meddling in Federal Reserve regulations, independent tariffs, or geopolitical altercations – constitutes a considerably greater hazard to the US currency than any strategies devised by the BRICS countries,” the specialist concludes.
