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18 July 2014, Financial Times

Using the BRICS bank to dilute the US dollar zone

Akshay Mathur, Head of Research, Geoeconomics Fellow, in an article for the Financial Times blogs section, talks about how the establishment of the New Development Bank enhances another key geoeconomic ambition of the Brics: to conduct more trade in local currencies, thereby diluting the dominance of the US dollar.

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The New Development Bank launched this week in Brazil by the leaders of the Brics countries – Brazil, Russia, India, China and South Africa – is to boost infrastructure and sustainable development projects through loans, guarantees, credits and equity investments.

But the bank’s establishment also enhances another key geoeconomic ambition of the Brics: to conduct more trade in local currencies, thereby diluting the dominance of the US dollar. Already, there is plenty of evidence to underscore the vitality of this ambition.

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