Egypt and India have begun talks to eliminate the US dollar from their trading relationship. The bold move is part of a growing trend among BRICS countries to reduce their reliance on the US dollar in international trade and signals a significant shift in the global economic landscape.
The decision by Egypt and India to bypass the US dollar in their trading activities marks an important step in the BRICS bloc’s broader strategy. Egypt’s engagement in the initiative follows its invitation to join the BRICS bloc at its 2023 annual summit. Inclusion is more than just formal membership; It is part of a concerted effort to reshape how global trade is conducted.
By settling trade in local currencies, these countries are not only building strong bilateral ties but also challenging the traditional dominance of the US dollar in international trade. India’s role in this change cannot be dismissed. As one of the most vocal countries within the BRICS bloc to reduce its dependence on the US dollar, India has been at the forefront of these efforts. India’s push to ditch the US dollar in trade relations with Ethiopia and a landmark oil deal with the United Arab Emirates (UAE) denominated in local currency are proof of the country’s commitment to the plan.
The addition of six new countries to the BRICS bloc, including Saudi Arabia, the United Arab Emirates, Iran, Egypt, Ethiopia and Argentina, reflects growing dissatisfaction with the current global financial system. The bloc’s concerted move toward expansion and de-dollarization is causing ripples across geopolitical boundaries, signaling a potential shift in the balance of economic power.
The talks between Egypt’s Finance Minister Mohammad Mait and India’s Ambassador to Cairo Ajit Gupta are not just regular diplomatic exchanges. They represent a concerted effort to formulate strategies that will strengthen investment and economic diversification between the two countries. Discussions also covered the use of Egypt’s significant bond issue in China for potential use in India’s financial markets, demonstrating a complex state of financial strategies aimed at reducing dependence on the US dollar.
This trend extends beyond just Egypt and India. The entire BRICS bloc has been vocal throughout the year about its ambition to reduce the dollar’s role in international trade settlements. Adopting a local currency in bilateral trade is not merely a financial strategy; It is a political statement that challenges the traditional dominance of the US dollar in the global economy. This change could potentially reshape the global economic order, reduce the long-standing dominance of the US dollar and usher in a more multilateral financial world. Source: Cryptopolitan.