Catenaa, Sunday, September 07, 2025- BRICS nations announced plans to uphold trading in local currencies, aiming to reduce reliance on the US dollar and strengthen economic sovereignty among member states.
The move comes as global powers explore alternatives to the dollar in international commerce and central bank reserves.
The initiative is intended to facilitate direct currency transactions for trade between BRICS countries, potentially lowering transaction costs and insulating economies from dollar volatility.
Leaders highlighted that local currency usage could support financial stability while promoting intra-BRICS economic activity.
The announcement coincides with efforts by the bloc to expand membership, with Saudi Arabia, the UAE, and Egypt joining recent discussions.
Analysts say the policy could encourage the development of a BRICS-backed payment system or a new currency framework, though details on implementation remain limited.
Market observers note that the strategy may gradually reduce demand for US Treasuries held overseas, with possible implications for global interest rates and dollar liquidity.
Economists suggest the initiative is a response to US monetary policy trends, sanctions, and geopolitical tensions that have driven countries to diversify foreign reserves.
While the dollar remains dominant in global trade, BRICS officials emphasized that local currency transactions will provide a complementary option, not an immediate replacement.
Financial institutions within the bloc are expected to explore settlement mechanisms and infrastructure to support cross-border transactions in local currencies.
