Geopolitical Economy Report How can BRICS de-dollarize the financial system?
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Oct 29, 2024 Kathleen Tyson, an expert on international monetary systems and former member of the Federal Reserve Bank of New York, joins the conversation to dissect BRICS' bold moves towards de-dollarization. Tyson delves into the implications of local currency trades and critiques the US dollar's dominance. The discussion navigates the potential of Special Drawing Rights as a new reserve currency and explores capital controls as a way to stabilize economies. Could a currency backed by commodities reshape global trade? Join Tyson for insights into this financial paradigm shift.
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BRICS Advances Local Currency Trade
- BRICS has substantially advanced local currency trade, with China and Russia leading in yuan and ruble usage.
- Currency optionality is now a strategic economic and national security objective amid fears of dollar sanctions.
BRICS Challenge Western Institutions
- BRICS countries critique existing international economic institutions for failing most developing countries.
- Despite internal differences, BRICS move is driven by China's rise and shared interest in alternatives to Western financial dominance.
No New Currency, Just Local Trade
- BRICS rejects creating a new currency, focusing instead on local currency trade among member countries.
- They face complex challenges building alternative financial infrastructure like payment systems and securities depositories.