Dethrone the dollar, the symbol of Western hegemony. As ambitious as it is complex, this objective will be one of those addressed at the summit of BRICS countries (Brazil, Russia, India, China and South Africa) from Tuesday, August 22 to Thursday, August 24 in Johannesburg, South Africa.
The heads of state in attendance (South African President Cyril Ramaphosa, his Chinese and Brazilian counterparts Xi Jinping and Luiz Inacio Lula da Silva, Indian Prime Minister Narendra Modi and Russian Foreign Minister Sergei Lavrov) will also be discussing the expansion of their bloc to include other countries, particularly African ones.
In recent months, Western sanctions imposed on Russia (such as the freezing of the central bank's dollar reserves, excluding Russian banks from the SWIFT international interbank communication network and banning oil imports from Moscow) have rekindled the interest of many emerging countries in "de-dollarization."
"Some are primarily seeking to reduce the use of the dollar in their own economies as a shield against international financial turbulence," said Zongyuan Zoe Liu, author of a study on the subject for the Council on Foreign Relations, an independent American think-tank. Others wish to escape the extraterritoriality of US law, which uses the dollar to impose sanctions and fines abroad.
"How is the US dollar part of trade between Kenya and Djibouti?" asked Kenyan President William Ruto before the Djibouti parliament on June 14. "Why does Brazil need the dollar to trade with China or Argentina? We can trade in our currency," echoed Brazil's Lula on August 3, calling for the creation of a common currency among BRICS countries.
Since the start of the war in Ukraine, there has been a sharp rise in initiatives to reduce the use of the dollar. Russia now sells its oil and gas to Beijing in renminbi. In January, it connected its interbank messaging system to that of Iran, enabling banks in both countries to exchange money without going through SWIFT. In the spring, China, which is also developing a competitor to SWIFT (the China International Payment System, CIPS), bought liquefied natural gas (LNG) from the United Arab Emirates in renminbi.
For the time being, these measures are having a limited effect. It is true that the weight of the dollar in central bank reserves is falling: It is now 59%, compared with 65% in 2016, according to the International Monetary Fund (IMF). But the dollar still accounts for 89% of foreign exchange transactions, 60% of trade invoicing, and 48.5% of international bond issues (10 points more than in 2003). "While there has been a slight decline in the dollar's share of monetary institution reserves, its hegemony remains unchallenged in other areas," said ING economist Chris Turner.
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