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Let’s journey into the heartbeat of our changing global landscape.
Can BRICS dethrone the US dollar?
The world, as we’ve known it with the US dollar reigning supreme, is undergoing a seismic shift. And it’s our business to be in the know!
Navigating local politics is already challenging. Add in global politics, power struggles, and a tapestry of cultures and beliefs, and it feels like we’re deciphering a grandmaster-level chess match … And the chessboard of geopolitics has seen some bold moves lately.
Russia’s invasion of Ukraine and intensified US–China competition have had two important geostrategic consequences. They have blown new life into the European Union and accelerated the expansion of BRICS.
We’re no longer in a world with one captain at the helm. We’re transitioning into a space where multiple players are jostling to set the course.
Now, BRICS isn’t just any alliance. It’s a voice of nations who’ve felt overshadowed by the West’s historical dominance.
They’re singing a song of change, questioning why institutions like the UN and WTO remain frozen in another era.
But, as with any group, BRICS isn’t without its internal rhythms and blues.
Consider India and China – two powerhouses in the same band but playing different tunes.
As we, in Africa, decide who to dance with, it’s essential to understand the music.
We’re not just choosing between the US or China – it’s about which rhythm resonates with our future.
According to a recent ISS article, although no single alternative to the dollar is likely, the shift away from a Western-led global order has begun
If you imagine the global economy as a race, think of India as a long-distance runner with stamina.
On the other hand, China is sprinting, possibly overtaking the US’s lead soon.
And BRICS?
It’s expanding its relay team, passing the baton to countries like Argentina, Egypt, and the UAE.
The West, my friends, is watching closely.
They feel the shift, the tug of a rope in a global tug-of-war. Their unity might also face tests, especially with wild cards like a potential Trump return.
Today, for every dollar the US pockets, China holds about 26 cents. But forecasts suggest that the BRICS collective might soon outshine the West.
The conversation around the US dollar is spicy. Think of it as the main ingredient in a global recipe.
But what if the recipe changes?
Especially with talks of oil possibly getting priced in different currencies. That’s why oil giants are keen on the BRICS narrative.
What the BRICS nations are eyeing isn’t just a replacement for the dollar, but an elevation of their own currencies.
They’re diversifying their financial portfolios, trading more in their national currencies.
And while there’s chatter about a global currency, think of it more as regions finding their unique financial flavours.
But don’t rule out the U.S just yet.
If the currency wars come down to gold, then the U.S. wins hands down! They hold more gold in reserves than the new expanded BRICS combined.
The previous 5-nation BRICS alliance held 5,495 tons of gold in 2023 and even after the alliance became an 11-member group, the newly expanded union only holds 6,600.23 tons of gold combined in their respective Central Banks.
As of 2023, the U.S. holds 8,133 tons of gold and no other country comes close to beating its feat.
That’s a full 1533 tons more than the new expanded BRICS bloc!
We’re on the cusp of a world where the US dollar, while still a heavyweight, shares the ring with other contenders.
For us in Africa, especially South Africa, this evolving landscape offers a vast market of opportunities.
But as we navigate this, remember: it’s not about putting all our eggs in one basket… it’s about smartly distributing them.
Strategy, dear friends, is the name of the game.
We need to keep our ears to the ground, our eyes on the horizon…
Do you think we can dance to the beat of this changing world?
