Despite a growing sentiment that the BRICS bloc has shifted its focus in light of the results of the 2024 presidential alliance, many experts believe that Donald Trump's return will not prevent this alliance from abandoning the US dollar. Specifically, the newfound interest of this collective in trading in local currencies will not cease despite a change in leadership in the United States.
Earlier this month, Russian President Vladimir Putin hinted that the days of dollarization for the alliance are over. However, according to economist Lauren Johnson, who recently discussed the political and financial significance of this activity, that is unlikely to happen. Moreover, why it is unlikely to end in the near future.
Experts say BRICS' commitment to trading in local currency will not stop when Trump returns.
In the past two years, de-dollarization has been a clear focus of the BRICS bloc. In the context of Western sanctions imposed on Russia, this group has been forced to find new ways to maintain economic viability. A weaponized US dollar has compelled Global South countries to integrate into a global shift, and that process has been going quite well.
However, everything is expected to change with the upcoming presidential change in the United States. Donald Trump has spoken about the importance of the dominance of the greenback. Therefore, he is likely to follow through on previous insinuations that he will lift sanctions to ensure the dollar is used.
Although that has led many to reconsider their views on the BRICS alliance, one economist believes that Trump's return will not stop this bloc from trying to abandon the US dollar. Specifically, Lauren Johnston, a prominent economist, has discussed the growing demand for promoting local currency.
"There are economic and political reasons to use local currencies," Johnston said in a recent interview. "Using local currencies for trade between countries will reduce transaction costs and lessen these countries' dependence on foreign currencies." Overall, Johnson believes that the desire to strengthen the economic capabilities of the group is more important than any cooperation that may be found with Trump's America.
In the past two years, there have been discussions about a common payment system for the BRICS group. However, the project has yet to make progress. Currently, those projects remain just developmental steps that may eventually become a reality.
Until they accomplish that, the world should expect this group to continue sustaining the pace of local currency transactions. At the end of the day, this could greatly benefit the group's standing on the international stage.
