Local Currencies Needed to Buy Oil

Amid the recent BRICS expansion and the bloc’s de-dollarization approach, the US and Europe may soon require local currencies in order to buy oil. 

Indeed, the past several months have proven the dominance of the oil market that is maintained by the alliance. Moreover, the trajectory of purchases shows the bloc may soon require a move away from the greenback.

Saudi Arabia has recently embraced a sharp cut in its oil exports. Specifically, the figure has reached a 28-month low. Moreover, Russia has embraced a voluntary supply cut of 1.3 million bpd. 

That figure equates to around 1% of global demand, presenting a move that could tighten the market and unveil a clear power dynamic.

Subsequently, oil-purchasing nations are rightfully concerned about the market tactics of both countries. Yet, the development could present a chance for the BRICS to forward their own currency agenda. 

A reality that could align with alliance-wide interest in working towards multipolar progress.  READ MORE...

Ditching the US Dollar

BRICS countries are looking to sideline the U.S. dollar by launching a new currency to settle international trade. The development challenges the dollar’s supremacy and could dethrone it from the global reserve status. The move is inspiring other developing Eastern countries to ditch the dollar and promote their native currencies for global trade. If the momentum continues, many more Eastern nations could join hands and end reliance on the U.S. dollar completely.

The leaders of 10 Southeast nations and the members of the Association of Southeast Asian Nations (ASEAN) have agreed to promote their native currencies for cross-border transactions. The 10 countries will reduce settling payments with the U.S. dollar and use their local currencies for transactions.

The group of nations wants to “encourage the use of local currencies for economic and financial transactions.” The 10 nations that have decided to ditch the U.S. dollar are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

The move will help these countries to end their dependency on the U.S. dollar and significantly boost their native currencies. The declaration accepted by the ASEAN nations said that their goal is to strengthen bilateral and multilateral payment activities. Trading in local currencies would be faster, cheaper, and easier to close deals than the usage of the U.S. dollar.

The official declaration accepted by these 10 developing Eastern countries read, “We adopted the ASEAN Leaders Declaration on advancing regional payment connectivity and promoting local currency transaction to foster bilateral and multilateral payment connectivity arrangements to strengthen economic integration by enabling fast, seamless, and more affordable cross-border payments across the region.”

In conclusion, apart from BRICS countries, now ASEAN nations will move away from the U.S. dollar. It is reported that the Gulf Cooperation Council (GCC) is also planning to move in the same direction. Read here to know more details on why the oil-rich Gulf countries want to end the U.S. dollar’s dominance.