BRICS Challenges US Dollar, But Replacement Unlikely: Standard Chartered

  • The US dollar is increasingly questioned by global emerging economies, especially the BRICS alliance, due to geopolitical tensions.
  • Sanctions, trade conflicts, and use of the dollar as a political tool have sparked calls for reducing reliance on the US currency.
  • Despite pressures, the dollar remains dominant in global trade, reserves, and financial markets.
  • De-dollarization is occurring slowly and does not imply the dollar’s imminent replacement.
  • Russia‘s removal from SWIFT intensified doubts about the dollar’s neutrality among emerging markets.

Standard Chartered recently evaluated the possibility of the BRICS alliance replacing the US dollar amid shifting global currency dynamics. Developing countries are increasingly moving away from the dollar as sanctions, national debt concerns, trade conflicts, and political use of the currency create tensions.

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Philippe Dauba-Pantanacce, Managing Director and Global Head at Standard Chartered, explained in a recent interview that while the US dollar faces scrutiny, it is unlikely to be replaced by BRICS currencies. “The dollar is not dead, but it is taking on new forms,” he said, emphasizing that many nations are distancing themselves from the greenback due to its weaponization in global politics.

The analyst noted that “more and more countries are seeking to reduce their dependence on the dollar, partly because the United States has used the dollar as a weapon for political purposes,” and highlighted that Russia’s exclusion from the SWIFT global payment system was a turning point. This event led emerging markets to question the currency’s neutrality, viewing it as heavily influenced by decisions made in Washington.

According to Standard Chartered, this skepticism results in a gradual but real de-dollarization trend, driven by BRICS and other emerging economies. However, Dauba-Pantanacce underlined that “de-dollarization is real, but progressing slowly and does not change the fact that the dollar remains the dominant currency in international trade, global reserves, and financial markets.”

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