Is the dollar dying!


2023-03-10 00:24:48

As the story goes, China is emerging as a rival to US first time since world-war-2. It is now using BRI, BRICS and SCO as platforms - building close linkages with OPEC+ and commodity rich Africa. G20 has spilt into G7+ Australia on one side and BRICS + Next-11 emerging economies on the other side. What next?

Brzezinski in his classic “The Grand Chessboard” talks about the power of Eurasia and how the powers that control Eurasia will control the world. Turns out these three powers are Russia, China and India. And all three are focused on de-dollarisation. Most BRICS+ economies are building current-account surpluses and using these to fund other emerging economies, thus rendering the IMF/World-bank power toothless. Where to from here?

Ukraine had a war and US weaponise dollar to corner Russia. However, this has made the BRICS economies speed-up de-dollarisation. China has signed a series of agreements with the Saudis to create the Pertroyuan and Russia is replacing dollar with UAE dirham in its trade with India. US created dollar swap lines with a few advanced economies, however China is creating Yuan swap lines with a number of emerging marketing economies in Eurasia.

UAE and Saudis, under “Project Aber”, are working on creating a common digital currency, this could later be adopted by other GCC countries as well. Under “Project mBridge” the BRICS central banks are building their own network of swap lines using digital currencies. As China convinces the Saudis to sell them the oil in Yuan and trade back in Yuan, Project-Aber and Project mBridge, will lay the foundation of de-dollarisation in the East.