The relationship between developing nations and the US dollar has been turbulent in recent decades, with the decision in 1944 to adopt the dollar as the global trade currency having a lasting impact. Now, with the BRICS bloc musing at a new common currency and countries like Russia and China pushing for de-dollarisation, Trump has taken to social media to threaten against any such moves. While India has denied any plans to move away from the dollar, Trump's remarks have raised eyebrows and added to the already tense relationship between the US and BRICS nations.
The BRICS and the US Dollar: A Shifting Currency Landscape
Background
The establishment of the US dollar as the global reserve currency in 1944 marked a significant turning point in international finance. However, in recent decades, this dominance has faced increasing challenges, particularly from emerging economies.
The BRICS (Brazil, Russia, India, China, and South Africa) has emerged as a powerful grouping of developing nations that have expressed concerns about the volatility and overreliance on the US dollar. These concerns have been fueled by factors such as:
The BRICS' Push for De-Dollarization
In response to these concerns, the BRICS nations have been exploring alternative currency arrangements. In 2015, they announced plans to establish a common reserve currency, the BRICS Contingency Reserve Arrangement (CRA). This arrangement, initially funded with $100 billion, is intended to provide financial assistance to member countries during economic crises and reduce dependence on the US dollar.
Russia and China, in particular, have been vocal advocates for de-dollarization. Russia has been reducing its holdings of US Treasury bonds and promoting alternative payment systems, while China is exploring internationalization of its currency, the renminbi.
Trump's Threat
In a series of tweets in 2018, US President Donald Trump threatened economic retaliation against any country that considered moving away from the US dollar. He warned that countries doing business with Iran, which the US had recently sanctioned, would "have a very big economic problem" if they used currencies other than the dollar.
Trump's remarks were met with criticism from BRICS nations and many analysts. They were seen as an attempt to bully countries into continuing to use the US dollar, despite their concerns about its stability and fairness.
Top 5 FAQs
1. What is the BRICS Contingency Reserve Arrangement (CRA)? The CRA is a currency pool established by the BRICS nations to provide financial assistance to member countries during economic crises and reduce dependence on the US dollar.
2. Why are the BRICS interested in de-dollarization? The BRICS nations are concerned about the volatility and overreliance on the US dollar, as well as the potential for currency manipulation and economic blackmail by the US.
3. What is the impact of Trump's threat against de-dollarization? Trump's threat has raised concerns that the US is willing to use economic coercion to maintain the dominance of the US dollar.
4. Is the US dollar still the global reserve currency? Yes, the US dollar remains the world's dominant reserve currency, accounting for over 60% of global reserves.
5. What are the implications of a potential shift away from the US dollar? A shift away from the US dollar could have significant implications for the global economy, including reduced demand for US exports, increased volatility in currency markets, and potentially higher inflation.
Maharashtra Deputy Chief Minister Devendra Fadnavis announced at the World Audio Visual and Entertainment Summit (WAVES) that Maharashtra has signed MoUs worth ₹8,000 crore for the development of world-class studios and universities. The state also launched the WAVES Index in collaboration with the NSE, which will strengthen the investment ecosystem in the entertainment sector. Fadnavis further shared plans for establishing a world-class education ecosystem and high-tech studios in the state, making Maharashtra a hub for the entertainment industry.
Prime Minister Narendra Modi inaugurated the Vizhinjam International Deepwater Multipurpose Seaport in Kerala. The port, developed by Adani Ports and Special Economic Zone Ltd, represents the transformative advancements in India's maritime sector. PM Modi, along with Kerala CM Pinarayi Vijayan and Adani Group Chairman Gautam Adani, marked the first phase of the country's first international deepwater port. Adani hailed the project as a triumph of vision, resilience, and partnership, while also thanking PM Modi and CM Vijayan for their support in making it a reality.
Indian Prime Minister Narendra Modi inaugurated the Vizhinjam International Seaport, developed by Adani Ports and Special Economic Zone Ltd, at a cost of Rs 8,867 crore. PM Modi emphasized the potential of port cities in driving India's economic growth and expressed his confidence that the country's presence in global shipping and trade routes will significantly increase with the opening of this transshipment hub. He also highlighted the efficient utilization of funds and resources, previously spent abroad, to drive domestic development and create new economic opportunities for the people of Vizhinjam and Kerala.
These new term life insurance plans offer double the premiums paid as a guaranteed payout, providing comprehensive coverage and a valuable return on investment. With flexible premium payment options and no additional cost for maturity benefits, policyholders can secure financial stability for their family and plan for retirement and legacy simultaneously. This innovative feature is a smart and rewarding way to safeguard one's loved ones and future.
On the 65th anniversary of the founding of Maharashtra and Gujarat, a Bengaluru-based startup, Vahan.ai, is using AI to reduce labour shortages in India's e-commerce and quick commerce industries. With over 10 lakh successful placements, the platform is expanding to other industries and regions, showcasing the potential of AI to positively impact India's workforce. National leaders, including the President, Vice-President, and Prime Minister, praised the cultural legacies and economic contributions of the two western states on their special day.
iQOO has announced the release of two new models in their Z10 series - the Z10 Turbo and Z10 Turbo Pro. The Pro model boasts Qualcomm's latest Snapdragon 8s Gen 4 chipset and an impressive 7,000 mAh battery with 120W wired charging. Meanwhile, the regular Turbo model has a MediaTek Dimensity 8400 chipset and an even larger 7,620 mAh battery with 90W charging. Both models have a 6.78-inch AMOLED display, IP65 dust and water resistance, and 50MP main cameras. Available in multiple color options, the phones are already available for purchase in China.
According to Tessa West, a social psychologist and NYU professor, overdoing kindness in the workplace can actually backfire and make people question your sincerity and damage authentic connections. In an interview with CNBC Make It, West explains how trying to cover up social discomfort with excessive friendliness can actually make it more obvious to others. She also provides ideas on how to combat this and build trust with colleagues through specific feedback and conversations about the "niceness culture."
Banks across India will be closed from April 29 to May 1, 2025 in observance of regional festivals and public holidays. While digital services will still be available, customers are advised to plan their banking activities accordingly. Details of the holidays and their observance can be found on the official RBI website or by contacting their respective banks. The closures include festivals such as Bhagvan Shri Parshuram Jayanti, Basava Jayanti, and Akshaya Tritiya, which celebrate religious figures and mark auspicious occasions for investments and purchases.
The Reserve Bank of India (RBI) announced its plan to purchase government securities worth Rs 1.25 lakh crore through open market operations (OMO) in the month of May. This decision aims to maintain orderly liquidity conditions in the system, with the central bank reiterating its commitment to monitor the market and take necessary measures. The bond purchase will be divided into four tranches, with detailed instructions to be released separately for each tranche. Stay updated on the latest business news and stock market updates through Zee Business.
In a significant development for India's defence capabilities, a deal worth Rs 63,000 crore has been signed for the acquisition of 26 Rafale Marine combat aircraft from France. The pact was sealed at a virtual event, which was attended by Defence Minister Rajnath Singh. The aircraft will be integrated into the aircraft carrier INS Vikrant, providing a boost to the Indian Navy's fleet.