President Vladimir Putin’s recent two-day visit to India marked a critical juncture in the ongoing de-dollarisation campaign, highlighting strong collaborative efforts between India, Russia, and China. As key BRICS members, these nations are actively pursuing avenues to conduct international trade in their respective local currencies, thereby diminishing their dependence on the US dollar. Analysts anticipate that Putin’s visit could pave the way for enhanced cooperation in using local currencies for bilateral trade and even bring the concept of a common BRICS currency closer to reality, a vision strongly supported by China.
The initiative gained significant traction at the November 2024 BRICS Summit in Kazan, Russia, where President Putin presented a prototype of a potential shared currency. He clarified that the goal is to create alternative financial frameworks rather than to abolish the dollar. This move aims to provide greater transactional freedom and reduce susceptibility to the dollar’s influence.
The push for financial alternatives is a response to the current global financial system, heavily dominated by the US dollar. Despite its widespread use, with nearly 89% of international currency trades involving the dollar, recent trends show a shift. In 2023, approximately one-fifth of oil trade was settled in currencies other than USD.
De-dollarisation signifies a strategic reduction in reliance on the US dollar. By promoting local currency transactions, BRICS nations aim to increase their financial autonomy, lessen vulnerability to US sanctions, and navigate global economic volatility more effectively. The upcoming BRICS summit in India is expected to further cement this alliance and its agenda against dollar supremacy.