Has the BRICS alliance hurt the dollar? Doesn’t seem so

The BRICS alliance has been increasingly releasing anti-U.S. dollar rhetoric that appears to be a coordinated effort by the economic block to dethrone the dollar as the world’s reserve.

 Has the BRICS alliance hurt the dollar? Doesn’t seem so (photo credit: SHUTTERSTOCK)
Has the BRICS alliance hurt the dollar? Doesn’t seem so
(photo credit: SHUTTERSTOCK)

Whether or not that has been successful, however, is still up for debate.

According to Russian Deputy Minister of Economic Development Dmitry Volvach, the Shanghai Cooperation Organization (SCO) has increased its share of using national currencies to trade between SCO member states from 40% in 2022 to 92% in 2024.

Market reaction to move

The market for the U.S. dollar didn’t seem to flinch at the change in usage.

From 2022 to present day, the dollar has significantly risen against the Chinese yuan as China experiences increased economic struggles that have resulted in the release of far-ranging stimulus packages in the past month.

 This chart shows the performance of the U.S. dollar to the Chinese Yuan. (Source: TradingView) (credit: PR)
This chart shows the performance of the U.S. dollar to the Chinese Yuan. (Source: TradingView) (credit: PR)

Since the beginning of stimulus actions from the Chinese government on Sept. 24, the yuan has fallen more than 1% against the dollar. China is undergoing a prolonged period of deflation, which spurred the government’s move to introduce more currency into the economy. Still, the repercussions on the yuan will likely be noticeable in years to come.

How has Russia done?

Russia’s invasion of Ukraine in February 2022 changed the geopolitical and economic landscape in many ways — driving energy prices temporarily through the roof and spurring increased tensions across the globe.

Things haven’t exactly gone well for the Russian ruble since then. After massive fluctuations in the foreign exchange market following the invasion, the U.S. dollar has steadily gained ground against the Ruble in huge fashion. 

 This chart shows the performance of the U.S. dollar to the Russian ruble. (Source: TradingView) (credit: PR)
This chart shows the performance of the U.S. dollar to the Russian ruble. (Source: TradingView) (credit: PR)

Compared to the U.S. dollar, the ruble has lost almost half of its value since the invasion two years ago.

Central bank buying

Since 2022, central banks have been gobbling up gold at levels not seen for decades. Some economic analysts have attributed this move to a concerted attempt at firing a shot across the bow of America’s currency. Others have suggested the move is a lead-up to releasing a new currency from BRICS nations, rumored to be named the “unit,” which would be backed 40% by gold and 60% by member country currencies. 

Going after the dollar?

Both theories are likely to have some merit, but the move from Russia, China and their BRICS allies are likely much more defensive than offensive. While the talk about a new currency and posturing against the U.S. dollar will help presidents Vladimir Putin and Xi Jinping save face amid serious economic struggles — one look at the foreign exchange markets shows they’re likely more focused on their own problems at home than taking down a currency that has served as the world’s leader since the end of World War II.

Featured Gold & Silver Investment Companies (Ad)

Augusta Precious Metals(Full Review)

Fees:

$0 (10 Years)

Minimum:

$50,000

"Best Overall" by Money Magazine, Award-Winning for 6 Years, Thousands of 5-Star Rankings

Expand DetailsRenowned for its exceptional customer service and commitment to transparency, Augusta Precious Metals has garnered numerous accolades, including "Best Overall" from Money magazine and "Most Transparent" from Investopedia. The company's dedication to educating and supporting its clients has earned it top ratings from organizations such as A+ from BBB and AAA from BCA.
Fees:

Vary

Minimum:

$25,000

Industry leader with over $2 Billion in gold and silver. Top rated precious metals company with buy back guarantee

Expand DetailsFrom precious metals iras to direct purchases of gold and silver, goldco have helped thousands of americans place over $2 billion in gold and silver. Top-rated precious metals company rated A+ by the better business bureau rated triple a by business consumer alliance earned over 6,000+ 5-star customer ratings Money.Com 2024 best customer service 2024 inc. 5000 regionals: pacific ranked #17 2024 gold stevie award, fastest growing company inc. 5000 award recipient, 8+ years

American Hartford Gold (Full Review)

Fees:

Vary

Minimum:

$10,000

American Hartford Gold, ranked #1 Gold Company on Inc. 5000, boasts thousands of A+ BBB ratings and 5-star reviews, endorsed by Bill O'Reilly and Rick Harrison..

Expand DetailsWith over $2 billion in precious metals sold, American Hartford Gold helps individuals and families diversify and protect their wealth. Their expert team provides investors with the latest market insights and a historical perspective, ensuring informed decisions. Trusted by public figures and praised for exceptional customer service, the company offers competitive pricing on top-tier gold and silver coins, backed by a 100% customer satisfaction guarantee

This article is for informational purposes only. The opinions and analysis herein are those of the author and are not financial advice. The Jerusalem Post (JPost.com) does not endorse or recommend any investments based on this information. Investors should consider their financial situation, investment goals, and risk tolerance before making any decisions. Consulting a qualified financial advisor is recommended. JPost.com is not liable for any investment losses from using this information. The information provided is for educational purposes only and should not be considered as trading or investment advice.