Overview

Click to expand overview
U.S. President-elect Donald Trump has warned the BRICS countries that if they attempt to replace the “mighty U.S. dollar” they would face “100 percent tariffs and should BRICS is not seeking to abandon the use of the US dollar in trade since the majority of the financial reserves of the community members are kept in the American A BRICS currency is unlikely because member nations have deep economic imbalances, depend heavily on U.S. dollar trade, and are not ready to adopt necessary Recent data from the US Treasury shows that BRICS members China, India, and Brazil dumped $18.5 billion in treasuries and dollars since last month. While China sold Old Mutual Wealth investment strategist Izak Odendaal yesterday (WED) said the Watcher Guru report was a bit misleading as the talk of ‘dumping’ the US$ assets

BRICS Not Dumping US Dollar, Strategist Claims: Dispelling the Narrative

Reports suggesting a massive BRICS sell-off of US dollars are misleading, according to Old Mutual Wealth investment strategist Izak Odendaal. While headlines may scream "BRICS dumping US dollar," the reality is far more nuanced. Odendaal yesterday (WED) said the Watcher Guru report was a bit misleading as the talk of ‘dumping’ the US$ assets needs context.

Why the \'BRICS Dumping US Dollar\' Narrative is Flawed

Recent data does show shifts in BRICS nations\' holdings. Recent data from the US Treasury shows that BRICS members China, India, and Brazil dumped $18.5 billion in treasuries and dollars since last month. While China sold some assets, this doesn\'t necessarily equate to a coordinated effort to dismantle the dollar\'s dominance. Such adjustments are often routine portfolio rebalancing, influenced by various factors including national economic strategies and global market conditions.

BRICS Currency Unlikely: Economic Realities Prevail

Talk of a BRICS currency replacing the dollar is largely speculative. A BRICS currency is unlikely because member nations have deep economic imbalances, depend heavily on U.S. dollar trade, and are not ready to adopt necessary monetary policy coordination. Each nation faces unique economic challenges and priorities that make a unified currency impractical in the short to medium term.

The US Dollar\'s Continued Importance to BRICS

Despite discussions about alternatives, the US dollar remains crucial for BRICS nations. BRICS is not seeking to abandon the use of the US dollar in trade since the majority of the financial reserves of the community members are kept in the American currency. The dollar\'s liquidity and global acceptance make it an essential tool for international trade and investment for these countries.

Trump\'s Warning: A Historical Perspective

Former U.S. President-elect Donald Trump\'s past statements highlight the historical tensions surrounding the dollar\'s role. U.S. President-elect Donald Trump has warned the BRICS countries that if they attempt to replace the “mighty U.S. dollar” they would face “100 percent tariffs and should...” While this reflects a desire to protect the dollar\'s status, the reality is that market forces and individual nation\'s economic decisions ultimately determine currency usage.

Conclusion: Evolution, Not Revolution

While BRICS nations may be exploring alternative payment systems and diversifying their reserves, the notion of a sudden and complete abandonment of the US dollar is unlikely. The relationship between BRICS and the dollar is more of an evolution than a revolution, driven by complex economic considerations and practical necessities. The "BRICS dumping US dollar" narrative is, therefore, an oversimplification of a far more intricate global financial landscape.

Top Sources

Related Articles