The monetary influence of BRICS is growing day by day. The latest news is that China's currency, the yuan, has overtaken the dollar as the most used currency in Russia. A change which is in line with the desire of the alliance countries to limit their dependence on the American currency.
The exit of BRICS from the dollar in progress
According to recent reports, the Chinese yuan has officially overtaken the greenback as the main currency in Russian trade. Figures show that the yuan accounts for more than 42% of foreign exchange trading in Russia, compared to 39.5% for the US dollar.
Those data demonstrate the growing importance of the Chinese currency in international transactions. Indeed, yuan trading volumes tripled in 2023, reaching $385 billion.
This reflects sustained confidence in the stability and usefulness of the Chinese currency. A development which is also interesting for the BRICS of which Russia and China are influential members.
This development must be seen as a significant change in the dominance of currencies. The latter itself reflects a broader BRICS trend towards dedollarization. This is through the alliance's commitment to promoting and adopting local currencies.
A response to geopolitical realities
It must be said that abandoning the American dollar in favor of local currencies is not only a strategic maneuver. It is above all a response to geopolitical dynamics, particularly those concerning Russia which is facing sanctions imposed by the West.
Basically, this situation has stimulated greater cooperation among BRICS members. Sharing the same concerns about the use of the dollar as an economic weapon, these states seek to alleviate their economic vulnerabilities.
Beyond these geopolitical considerations, the strengthening of economic ties between Russia and China has played a role in this development. Bilateral trade between the two nations reached $240 billion in 2023, an annual increase of more than 26%.
This upward trajectory is indicative of a broader trend toward increased economic interdependence within the BRICS. A policy further reducing the alliance's dependence on external currencies, such as the dollar.
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