BRICS Nations Join Hands to End Dollar Dominance At Summit

• South Africa Prepares for BRICS Summit and Expansion where leaders will discuss expanding the economic bloc.
• BRICS nations have been working to end the dominance of the US Dollar and paving an alternative path ahead.

South Africa, which is hosting the BRIS summit this year in 2023, has published a list of 23 countries willing to be part of this economic bloc. South Africa’s Minister of International Relations and Cooperation, Naledi Pandor, revealed about receiving new applications in a briefing on Monday, August 7.

The BRICS summit shall happen ahead of this month on August 22-24 in Johannesburg, South Africa. Pandor mentioned that during the summit, the BRICS nations’ leaders will receive a unique report about the principles for broadening the association and a list of countries interested in joining the economic group. these leaders would further discuss the expansion of the bloc. Pandor continued:

“It is the leaders who will make the final decision on this issue. We remember that South Africa was the first country to be admitted to the association after its creation. As the BRICS chairman, South Africa will negotiate at the summit on the expansion model and its principles and criteria. We are gradually moving towards a consensus on BRICS expansion and we hope that it will be reached at the summit.”

South African President Cyril Ramaphosa, with support from fellow BRICS leaders, has invited 67 leaders from Africa, Latin America, Asia, and the Caribbean to the summit.

Additionally, 20 representatives of major international organizations will attend, including the UN Secretary-General, African Union Commission Chairperson, and New Development Bank President. Invitations also extend to leaders of African Regional Economic Communities and financial institutions, the African Continental Free Trade Area Secretariat, and the African Union Development Agency CEO.

With BRICS Rising, Is Dollar Dominance Ending?

Last week on August 3, Lowy Institute, an independent think tank on international policy, published a piece titled “De-dollarization: shifting power between the US and BRICS”. Michael Roach, the author of the story, noted that the dollar supremacy is ending.

He further explained that in 2021, when Saudi Arabia and Russia signed a military agreement, the U.S. lost its exclusive role as Saudi Arabia’s protector. Also, at this year’s Davos World Economic Forum, Saudi Arabia’s Finance Minister announced openness to trading in currencies other than the U.S. dollar, signaling a move away from dollar reliance.

The analyst also pointed out that Russian President Vladimir Putin announced the intention to create an “international reserve currency” during the 2022 BRICS summit. There have been rumors that the BRICS nations are considering a common currency backed by gold. However, Leslie Maasdorp, Vice President and Chief Financial Officer of the New Development Bank (BRICS Bank), stated last month that any alternative to the U.S. dollar is a “medium to long-term ambition.”

In its latest piece, the Lowly Institute explained that central banks worldwide are already stockpiling Gold reserves. Roach stressed that “Countries are positioning themselves for a new international system”. He added:

As the reliance on U.S. dollars diminishes, central banks will begin dumping their dollar reserves. This will result in hyperinflation, a spike in interest rates to compensate for the loss of purchasing power, and falling asset prices, further accelerating U.S. decline.

A recent report also suggests that the BRICS nations are exploring local currency for cross-border settlements to reduce the dependency on Dollar.

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