The BRICS alliance is forming new trade agreements where the usage of local currencies will be prioritized over the US dollar. Developing countries in Asia, Africa, and Latin America are looking to end dependency on the US dollar to strengthen their local currencies and businesses.
Non-BRICS countries are also looking to renegotiate trade deals to put their respective local currencies ahead of the US dollar. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
Also Read: BRICS Expansion Will Change the Global Economy: Expert
Maldives is in discussion with BRICS member India to settle cross-border transactions in local currencies and not the US dollar. The island nations want to pay their local currency, the Maldivian Rufiyaa, for its imports with India. Maldives imports goods worth $780 million to India every year and is negotiating to pay the settlements in the Rufiyaa.
Also Read: De-Dollarization Main Agenda of BRICS 2024 Summit
Asia’s most-loved holiday destination Maldives is also in negotiation with China to accept local currencies for trade and not the US dollar. If BRICS countries India and China agree to trade in local currencies with Maldives, the US dollar will be the hardest hit.
Minister for Economic Development in Maldives, Mohamed Saeed said that there could be a possibility to make non-US dollar payments. The decision to accept local currencies and not the US dollar for payments is now in BRICS member India’s court. “There was a possibility to make non-dollar payments for all of these massive import arrangements,” said Saeed.
Also Read: BRICS: Another Country Officially Ditches the US Dollar
The negotiation might go thorough as India had allowed to open special Vostro bank accounts in Maldives in 2023. The Reserve Bank of India (RBI) promoted the Indian Rupee with Maldives in the bilateral agreement. Therefore, chances of the BRICS member India accepting the local currency Rufiyaa and not the US dollar could be a possibility due to mutual understanding.
Disclaimer: Our articles are NOT financial advice, we are not financial advisors. All investments are your own decisions. Please conduct your own research and seek advice from a licensed financial advisor.
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