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De-dollarisation debate sparks interest and fear across the globe

FILE PHOTO: U.S. dollar banknotes are displayed in this illustration taken, February 14, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

FILE PHOTO: U.S. dollar banknotes are displayed in this illustration taken, February 14, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

Published Aug 24, 2023


Johannesburg - The issue of "de-dollarisation" has not been concluded among the five BRICS members, who on Thursday made a declaration to expand the membership of BRICS countries.

The declaration on the expansion of BRICS has seen Argentina, Egypt, Ethiopia, Iran, the UAE, and Saudi Arabia accepted as the new members of the BRICS countries.

According to financial media website Investopedia, de-dollarisation is the process of moving away from the world’s reliance on the US dollar as the chief reserve currency.

During his opening address of the BRICS Business Forum on the first day of the BRICS Summit on Tuesday, Russian President Vladimir Putin said the de-dollarisation process was irreversible after decades of Western dominance in trade relations.

"De-dollarisation is gaining momentum. We co-operate on the principles of equality, partnership support, and respect for each other's interests, and this is the essence of the future-oriented strategic course of our association, a course that meets the aspirations of the main part of the world community, the so-called global majority," Putin said.

He added that trade among the BRICS countries continued to grow, saying that these countries represent more than 40% of the world's population.

Even though no declaration was made on the issue of moving away from the dollar, the topic is reported to have featured prominently during the deliberations by BRICS leaders.

The issue has sparked controversy and debate among economists and ordinary people alike. However, this week Finance Minister Enoch Godongwana said the issue was premature for South Africa to enter this debate.

Godongwana was speaking on the sidelines of the summit on Tuesday. He underlined that South Africa’s trade was still largely skewed towards the West.

These talks come hot on the heels of a proposal made by BRICS countries early this year, where in a joint statement titled “The Cape of Good Hope”, BRICS leaders expressed their support for a free, open, transparent, inclusive, equitable, non-discriminatory, and rules-based multilateral trading system with the World Trade Organization (WTO).

However, chairperson of the Egyptian Stock Market, Rami El-Dokany, said de-dollarisation would not be possible at this time as the continent was struggling to attract international investors due to market instability caused by unpredictable exchange rates.

The Star