BRICS' Oil Exporters Shift to Local Currency Settlements, Challenging US Dollar Dominance
With major oil exporters such as Iran, Saudi Arabia, and the United Arab Emirates joining BRICS, analysts believe that a wider adoption of local currencies for trade among BRICS countries, rather than using the US dollar, is becoming more natural. This shift towards local currency settlements could reduce transaction costs and weaken the role of the US dollar as the global reserve currency. The trend of reducing holdings of US Treasuries has already emerged, with countries like Saudi Arabia and the UAE selling off significant amounts of US debt. The de-dollarization trend is seen as a response to the US' unilateral financial sanctions and the economic instability caused by unlimited quantitative easing and interest rate hikes.