- Vladimir Putin is visiting India to hold talks with Prime Minister Narendra Modi.
- About 90% of trade between Russia and India is settled in their local currencies.
- This move reduces reliance on the US dollar among BRICS countries.
- Using local currencies aims to boost economies and control inflation within these nations.
- BRICS has not introduced a new currency but continues to shift away from dollar-based transactions.
Russian President Vladimir Putin is currently in New Delhi, India, for a two-day visit aiming to renew trade agreements and shape policies with Prime Minister Narendra Modi. The discussions focus on expanding bilateral cooperation and reducing dependence on the US dollar in trade.
During the visit, Putin confirmed that Russia and India, both members of the BRICS group, now settle approximately 90% of their trade in local currencies. The Russian ruble and the Indian rupee are used for cross-border transactions, minimizing the role of the US dollar in their economic interactions, as stated on Friday in New Delhi.
This trend among BRICS nations reflects a broader shift toward a multipolar financial world order, aimed at diminishing Western dominance. While BRICS has not launched a new common currency, countries within the bloc have increasingly adopted local currencies to process payments, a practice that has contributed to a reduction in the US dollar’s share of global transactions.
The use of local currencies has gained momentum since former US President Donald Trump‘s tenure, particularly due to trade wars and tariff policies that disrupted global trade flows. These developments have brought developing countries together, with the US being seen as an external pressure affecting global trade.
Local currency settlements also provide economic benefits such as supporting domestic currencies, boosting gross domestic product (GDP), and controlling inflation. This alternative payment method helps BRICS members stabilize their economies amidst growing international trade challenges.
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