Finance – How might the BRICS initiative impact the US Dollar?

The BRICS initiative, especially with its potential expansion and discussions about creating a common currency, could impact the US dollar (USD) in several ways. Here are some possible impacts:

1. Reduced Demand for USD:

  • Trade Settlements: If BRICS countries start using their own currencies or a new BRICS currency for trade among themselves and with other countries, the global demand for the USD for international trade could decrease.
  • Diversification of Reserves: Central banks might diversify their foreign exchange reserves away from the USD in favor of a BRICS currency or other currencies within the bloc.

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