BRICS Russia and Iran Officially Ditch the US Dollar: A New Era in Trade?
The global financial landscape is shifting. BRICS members Russia and Iran announced that they have officially abandoned the US dollar for trade between the two nations. This move signals a growing trend of de-dollarization and a desire among certain countries to reduce reliance on the American currency.
Russia reported that 96% of all transactions between the two nations are now conducted in currencies other than the dollar. This significant shift underscores the strengthening economic ties between Moscow and Tehran and highlights their commitment to a trade system independent of the US dollar.
Iran and Russia are the latest to officially ditch the US dollar, opting to use national currencies for trade. This decision is driven by a desire to circumvent sanctions and foster greater economic sovereignty. Both nations face varying degrees of international economic pressure, making alternative trade mechanisms increasingly attractive.
Iran and Russia are both part of the BRICS bloc of countries. The BRICS alliance, comprising Brazil, Russia, India, China, and South Africa, has increasingly voiced its support for a multipolar financial system. This move by Russia and Iran aligns with the broader BRICS agenda to challenge the dominance of the US dollar in international trade and finance.
Russia and Iran are in the process of finalizing a new national payment integration system that will allow both countries to settle trade in local currencies and officially bypass the SWIFT system, further isolating them from Western financial infrastructure. This system aims to streamline transactions and reduce dependence on intermediaries that could be subject to US influence.
The impetus behind this dramatic shift is clear. As Mohammad Reza Farzin, Governor of the Central Bank of Iran, stated, “We have concluded a monetary agreement with Russia and completely eliminated the dollar. From now on, we only use the ruble and the rial.” This definitive statement solidifies the commitment of both nations to a dollar-free trade relationship.
This developing story raises important questions about the future of the US dollar’s global dominance and the evolving dynamics within the BRICS alliance. Will other countries follow suit? Only time will tell, but the de-dollarization trend is undoubtedly gaining momentum.