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If the BRICS are successful in holding up their de-dollarization initiative, the U.S. could certainly lose its grip. De-dollarization has the potential to change the global De-dollarization is currently a prominent topic of discussion across the globe. Many nations have stepped forward to reduce their reliance on the dollar and Saudi Arabia has held off formally joining the BRICS bloc of nations despite attending a meeting in Brazil last week, two sources said, finessing an issue that could upset In seeming confirmation of this movement, immediately following the BRICS Summit, China and Saudi Arabia renewed the existing currency swap agreement and signed a memorandum of

Saudi Arabia and BRICS De-dollarization: A Game Changer?

De-dollarization is currently a prominent topic of discussion across the globe. Many nations have stepped forward to reduce their reliance on the dollar, and speculation is rife about Saudi Arabia's potential role in this shift. The question is: Could Saudi Arabia aid the BRICS de-dollarization initiative, and if so, how?

The BRICS nations (Brazil, Russia, India, China, and South Africa) have been actively exploring alternatives to the US dollar in international trade and finance. If the BRICS are successful in holding up their de-dollarization initiative, the U.S. could certainly lose its grip. De-dollarization has the potential to change the global economic landscape.

Saudi Arabia's Position: Cautious But Engaged

Saudi Arabia has held off formally joining the BRICS bloc of nations despite attending a meeting in Brazil last week, two sources said, finessing an issue that could upset existing geopolitical relationships, particularly with the United States. However, this doesn't mean Saudi Arabia is uninterested in diversifying its financial partnerships. In seeming confirmation of this movement, immediately following the BRICS Summit, China and Saudi Arabia renewed the existing currency swap agreement and signed a memorandum of understanding. This indicates a clear intention to foster closer economic ties and potentially bypass the US dollar in bilateral trade.

How Saudi Arabia Could Aid De-dollarization

Several avenues exist for Saudi Arabia to contribute to the BRICS de-dollarization efforts:

  • Bilateral Trade in National Currencies: Expanding existing currency swap agreements with countries like China to settle oil and other commodity transactions directly in Riyal and Yuan.
  • Investment in BRICS' Financial Infrastructure: Participating in initiatives like the New Development Bank (NDB) to support infrastructure projects within BRICS nations using local currencies.
  • Diversifying Reserve Assets: Gradually shifting a portion of its vast foreign exchange reserves away from US dollars and towards other currencies, including those of BRICS nations.
  • Promoting Regional Currency Usage: Encouraging the use of the Riyal in trade settlements within the Gulf Cooperation Council (GCC) and other regional trade blocs.

The Implications of Saudi Involvement

Saudi Arabia's involvement in the BRICS de-dollarization initiative, even in a limited capacity, would significantly amplify its impact. Given Saudi Arabia's position as a major oil exporter and a key player in global finance, its actions would send a strong signal to other nations, potentially accelerating the shift away from dollar dominance. This could lead to a more multi-polar global financial system, where the US dollar's influence is diminished.

The future of de-dollarization and Saudi Arabia's role within it remains uncertain, but the current trends suggest a growing interest in exploring alternatives to the US dollar, driven by economic diversification and geopolitical considerations.

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