BRICS’ NDB Offers Loans In Local Currencies
The US dollar has been losing its significance in global trade as global nations are slowly moving away from relying on the currency. The New Development Bank (NDB) of the BRICS group has recently announced that it will begin offering loans in local currencies, a move aimed at reducing the dependency on the US dollar.
BRICS New Development Bank now offers loans in local currencies instead of US dollars. pic.twitter.com/PnMBwVF51E
— Watcher.Guru (@WatcherGuru) April 23, 2023
Breaking US Dollar Dependency
The US dollar became a global reserve currency after the pound sterling lost its value during WWI and WWII. However, as the global economic landscape changes, more countries are looking to move away from the US dollar and establish their own currencies as dominant.
NDB President Dilma Rousseff confirmed the bank’s plan to offer loans in local currencies in a recent interview with CGTN. She explained that the move is necessary to avoid foreign exchange risks and other issues such as being dependent on a single currency, such as the US dollar.
Strengthening BRICS Economic Ties
Rousseff further elaborated that providing 30% of the loans in the local currencies of BRICS member countries will help them avoid exchange rate risks and finance shortages. The BRICS group consists of Brazil, Russia, India, China, and South Africa, and the move to offer loans in local currencies is expected to further strengthen their economic ties.
The decision by the NDB to offer loans in local currencies is part of a broader trend of countries looking to reduce their reliance on the US dollar. In recent years, several countries, including Russia and China, have been actively promoting the use of their own currencies in international trade.
The move is expected to have a significant impact on the global economic landscape, with many analysts predicting that the US dollar’s role as a dominant currency will continue to decline in the coming years. As more countries look to establish their own currencies as dominant, the global economic balance of power is likely to shift, potentially leading to significant geopolitical changes.
